Budget expectations - Infrastructure Sector

EXPECTATIONS

1.The government may restore tax exemption under Section 80  CCF of the Income Tax Act on infrastructure bonds worth INR20,000 per individual, thereby boosting the investment in infrastructure

2. Increase in allocation of funds to various infrastructure flagship programmes like JNNURM Bharat Nirman APDRP AIBP and NHDP.

3.Permitting 100% refinancing of INR debt through ECBs.

4.Increase in taxes as differential between MAT and IT comes down.

5.The government to exempt a holding company from paying dividend distribution tax if the dividend received from its subsidiaries is invested in infrastructure projects.

6.Reduction in customs duty on import of equipments for ports.

7.Major policy measures in respect of public-private partnership  (PPP) projects to increase the private sector’s participation.

IMPACT

1.Increase in the ( company) borrowing limit for infra-bonds in order to give a push to infrastructure development is positive for the sector.

2.It will provide impetus to award of projects and enhance the inflow of orders to the construction industry Positive for NCC L&T, ITNL etc.

3.This will help the industry to reduce the cost of debt. Positive for all the companies in the infra space.

4.Any increase in MAT in the context of a tight fiscal situation would be negative for the sector.

5.Positive for all private infra developers .

6.Given the need for up gradation of port infrastructure, this exemption would help port developers to procure new technology at lower cost. Positive for all port developers.

7.Positive for all private infra developers .