The Hindu : Thrust to investments in infrastructure

Online edition of India's National Newspaper
Wednesday, Feb 04, 2004

National

National

Thrust to investments in infrastructure

By Our Special Correspondent

NEW DELHI, FEB. 3. Giving a thrust to investments in infrastructure, the Government has raised the Plan outlay for 2004-5 by over Rs. 6000 crores for power, roads and highways as against the revised estimates for the current fiscal.

In the case of the power sector, the outlay in the interim budget has been raised by Rs. 3592 crores while for roads and highways, there has been an increase of Rs. 3040 crores.

Making a commitment to provide more sops to investment in these key areas, the Finance Minister, Jaswant Singh, said fiscal benefits available to new projects in the power sector needed to be extended to 2012 instead of 2006. He felt that these should be available to cases of takeover from State electricity boards. The suggestion for making countervailing duty for the power sector CENVAT-able would also be examined, he said.

But fiscal incentives for the power sector would have to wait for the next Government since it would need amendments to the Income Tax Act. "While changes in the Act are currently not being proposed, it is the conviction of the Government... also our commitment," he said, referring to the measures.

Another proposal in this category is a tonnage tax scheme for the shipping industry to provide a level playing field to the domestic industry, since over 90 per cent of world shipping tonnage is subject to very low levels of taxation.

The increase in outlay for the Shipping Ministry is roughly Rs. 1000 crores from Rs. 1487 crores in the revised estimates for 2003-4 to Rs. 2420 crores. In the case of road transport and power, the original budget estimates for 2003-4 were as high as Rs. 10,331 crores and Rs. 14,668 crores, but the ultimate use pared down the revised estimates considerably.

The Government has still decided to pump in higher funds into these two sectors, given the importance of infrastructural growth.

The Plan outlay for the Petroleum Ministry is Rs. 25,000 crores which consists of Rs. 18,038 crores for exploration and production of crude oil and natural gas, including transport of natural gas; Rs. 5,536 crores for refining and marketing of petroleum products; and Rs. 1,406 crores for petrochemicals. This is slightly higher than the revised estimates for 2003-4 which refers to an outlay of Rs. 24,713 crores.

Investments by the major oil companies such as the Oil and Natural Gas Corporation and the Indian Oil Corporation comprise the main components of the outlay, which will be financed entirely by their internal resources.

Printer friendly page
Send this article to Friends by E-Mail

National