The finance ministry is planning to give infrastructure status to several businesses which currently enjoy tax breaks without the infrastructure title. These include entities operating oil pipelines, liqufied natural gas( LNG) terminals, strategic storage of crude oil, tourism and capital stock of educational institutions and hospitals.

The Income Tax Act allows investment allowance in the case of hospitals and oil pipelines. SEZ developers and units get some tax holiday but not 100% tax-free profits for ten years as infrastructure companies enjoy.

Once they are classified as infrastructure, they will get a 10-year tax holiday. Besides income tax exemption, an industry counted in infrastructure is allowed to borrow funds from foreign lenders and are also provided easy credit by domestic banks.

The total number of industries which will enjoy infrastructure status will be 25 after the inclusion of new sectors. Now, this list includes power, road, ports and telecom.

Finance minister Pranab Mukherjee in his Budget 2011-12 proposed to include cold chains and post-harvest storage as infrastructure sub-sectors.

The proposed list will now go to a committee of secretaries for their views and then will be sent to the Cabinet committee on infrastructure for final approval.

The ministry is working on the sectors eligible for viability gap funding. The finance ministry is likely to notify in a week its budget announcement of extending viability gap funding to schools and hospitals. An official from the ministry told FE on condition of anonymity that the ministry is preparing a detailed paper on the potential of viability gap funding(VGF) for infrastructure. The notification making schools, hospitals, industrial training institutions and skill development centres eligible for VFG will be issued in a week.

Replying to the discussion on Budget 2011-12 in Lok Sabha, Mukherjee said capital stock in educational institutions and hospitals would be treated as infrastructure sub sectors and capital investment in them would be eligible for Viability Gap Funding.

Mukherjee added that investment in education and health sectors enjoys high priority.

The viability gap funding scheme was started in 2006. Till now 700 projects worth R45,090 crore with the viability gap funding of Rs 8,811 crore have been approved. Centre alone has approved some 70 projects till now. The ministry is likely to invest Rs 500 crore in 2011-12 in the viability gap funding eligible projects.