Infra push good but building blocks remain, says industry
Measures announced by finance minister P Chidambaram in his Budget to boost infrastructure growth seem to have enthused the industry looking to invest in the sector. But bigger worries such as faster clearances, especially environmental, and a sound regulatory structure still remain. These, if not tackled, may hold back firms from going the extra mile.
Broadly, the industry is happy with measures such as infrastructure debt funds (IDFs) and investment-based incentives instead of profit-based measures. For instance, firms investing R100 crore or more in plant and machinery between April 2013 and March 2015 would be entitled to deduct an allowance of 15% of the investment in addition to the current rates of depreciation.
“Budget measures are steps in the right direction, but much more is needed to remove challenges on operational fronts that will increase attractiveness of investment in the infrastructure sector,” Satish Mandhana, managing partner and CIO (IDFC Alternatives), IDFC Private Equity, told FE.
He said issues related to land acquisition, effective inter-state coordination for projects, timely environmental and forest clearances, presence of regulators and effective PPP models need to be addressed.
In order to help some firms raise capital, the Budget has provided for an increase in the limit of tax-free bonds from R25,000 crore to R50,000 crore for 2013-14.
L&T Infrastructure Finance said it is a positive move and if not restricted to public sector firms and applicable to private companies, it would like to avail of the opportunity. “We would like to time an infrastructure bond issue in
Be the first to comment.
