However, unless bureaucratic delays and funding difficulties are overcome, the sector will not achieve the desired growth, they add. Several policy initiatives have been announced in the past to accelerate growth of the core sector but not much has been achieved due to frequent policy changes and bureaucratic hurdles.

The latest budget has once again announced additional benefits for investment in infrastructure, including power (generation, transmission and distribution), ports and roads.

As for the power sector, provision of section 80-1A of the Income Tax Act which allows a five year tax holiday and a deduction of 25 per cent (30 per cent in case of companies) of profits in the subsequent five years to generation and distributionprojects has not been extended to independent transmission and power distribution projects. Further, the developers can avail themselves of these benefits in any 10 consecutive years of the first 15 years from the date of commencement of the project. "This will not only attract investment in power sector but also make funding cheaper," said RV Shahi, CMD of BSES, the Mumbai-based power utility. However, the increase in customs duty on transmission projects (above 65kv) from 22 to 25 per cent and CVD from 10 to 16 per cent is not justified as it will make the these projects expensive, he added. The incentives for infrastructure are likely to attract investors but the budget should have included policies to encourage hydel power generation by directing banks to increase exposure to these projects, said S Rajagopal, former cabinet secretary and one of the founders of power sector reforms.

The increase in budgetary outlay for infrastructure is a positive sign but it remains to be seen how much of this is thenet support crucial for the public sector, he added. Clause (23 G) of Section 10, which provides that any income of an infrastructure capital fund/company by way of interest, dividends (other than the dividends referred to in section 115-0) and long term capital gains from investment made way of equity or long term finance in an infrastructure facility shall not be included in computing the total income, has been amended.