Budget may offer tax breaks to power firms

Jun 30 2014, 07:18 IST
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The biggest beneficiary will be state-owned NTPC, which is expected to commission over 2,000 MW of capacity in the current fiscal. Reuters The biggest beneficiary will be state-owned NTPC, which is expected to commission over 2,000 MW of capacity in the current fiscal. Reuters
SummaryBenefits for units coming up in FY15, may be broad based later.

decision to extend the incentive scheme may be announced later. The power ministry wants the benefit for all power projects getting commissioned in the 12th Plan. The industry, of course, wants the incentive to continue for all projects getting commissioned, even in the 13th Plan period.

Analysts point out that another extension of Section 80-IA is not in line with the tax policy intent of doing away with profit-linked deductions and only retaining the investment-linked ones.

“This would be a good move but we want the benefits to extend for all power projects getting commissioned till the end of the 13th Plan. To achieve the government’s stated objective of giving 24x7 power to all, we need to double our current generating capacity by 2022. This would require both (Section) 80-IA and ‘mega power’ benefits are restored’, Ashok Khurana, director-general, Association of Power Producers, told FE.

The government targets to add 88,000 MW of fresh generation capacity in the 12th Plan. Tax holiday could act as a catalyst in attracting the much-needed investment in the sector, analysts said.

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