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Step in right direction Marginal reduction in LPG prices can be expected. Upstream companies would need to tighten their belt to maintain their margins Partha Bardhan   With higher allocation for infrastructure sector and announcements on SPVs for infrastructure projects, the Budget does indicate a definitive intention of the government to strengthen the sector. The allocated funds may not be adequate, in comparison to the needs. However, they do provide the impetus for growth of the sector. Higher borrowing limits for the infrastructure SPVs is a welcome move. This should attract private equity to this sector and fuel the much desired growth of the sector. Infrastructure growth would also fuel growth of the economy as a whole, and in particular of agricultural sector. Reduction of custom duty on crude oil, would benefit downstream companies, without any impact on consumers. Of course, we may expect marginal reduction in LPG prices. Upstream companies would need to tighten their belt to maintain their margins. Overall this budget is in the right direction and should support the economic growth envisaged for India. • Special purpose vehicle to fund projects, especially for foreign fund component; projects to be evaluated by financial institutions • Crude, LPG, kerosene customs duty cuts; LPG, kerosene excise duty cut to nil; petrol, diesel excise rates up • Urban infrastructure fund allocation set at Rs 5,500 crore, of which Rs 1,650 crore is by way of grants • Service tax on pipeline movement — GAIL moves natural gas; IOC, HPCL, BPCL etc , move 67% petro products using pipeline • 50 paise per litre additional cess on petrol, diesel to fund new road projects; currently consumers pay Rs 1.50 per litre cess on each The writer is Executive Director, KPMG

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