INFRASTUCTURE

Overall impact on sector- Neutral

Parallel Excise Duty exemption for domestic suppliers

producing capital goods needed for expansion of existing
mega or ultra mega power projects.

Full exemption from basic Customs Duty to bio-asphalt and

specified machinery for application in the construction of
national highways
 ●
Allocation Rs 2,14,000cr - increased
Proposal by 23%

Impact ●
Higher order inflows

Companies ●
Positive for the sector
 Tax free infra bonds -Rs 30,000 cr; additional tax deduction of
●

Proposal Rs 20,000 for investment in long-term infrastructure bonds

extended by one more year

Investors will benefit due to tax deductions available and

●

Impact companies will benefit as it will ease their financing needs

Companies ●
Positive to companies who borrow
 ●
Current surcharge of 7.5% on
Proposal domestic companies reduced to 5%

●
Lower taxation leading to higher
Impact profit

Companies ●
Positive for the sector
 ●
Minimum Alternative Tax proposed
Proposal to be increased from 18% to 18.5%

●
No significant increase in effective
Impact taxation costs

●
Positive for infrastructure
Companies developers or asset owners
Proposal FII limit for investment in corporate bonds issued
●

in infrastructure sector doubled to $40 billion

Impact ●
Higher foreign flows into the sector

Companies ●
Positive for the sector  
 ●
IFCL to achieve cumulative disbursement target of Rs20,000 crore by

Proposal
FY11-end which will further go up by 25% in FY12;
●
Seven projects sanctioned with debt of Rs 1,500 crore under take-
out financing scheme while another Rs 5,000 crore will be
sanctioned in FY12

Ease in financing of long term funds needed by

●
infrastructure

Impact
companies as banks are largely constrained due to asset liability
mismatch and at 13% of outstanding credit of banks,
infrastructure sector is close to the maximum sectoral
allocation limit

Companies ●
Positive for the sector
 Parallel excise duty exemption for domestic suppliers
●

Proposal producing capital goods needed for expansion of

existing mega or ultra mega power projects (UMPPs)

Anomaly of full excise paid by domestic manufacturers

●

Impact and concessional basic customs duty of 2.5% enjoyed by

imported equipments has been corrected

●
Larsen and Torubro and Bharat
Companies Heavy Electricals Limited
 ●
Removal of production and distribution bottlenecks for items like

Proposal fruits and vegetables, milk, meat, poultry and

exemptions from excise duty enlarged to
needed for storage and warehouse
fish. Scope of
include equipments
facilities on agricultural produce\

●
Higher investments for building
Impact cold chains

Companies ●
Voltas, Blue Star