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Our Bureau

Chidambaram proposes to hike allocation for developing highways

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New Delhi Feb. 28 While welcoming the Budget proposal to increase allocation for building highways and creating corpus fund for public private partnership (PPP) projects, the companies involved in road construction sector appears to have been disappointed by the Finance Minister not allowing duty-free import of construction equipment for other infrastructure projects that they undertake.

According to Mr Ankineedu Maganti, Director, Soma Enterprises, "The setting up of a corpus of Rs 100 crore revolving fund for the PPP projects will definitely lead to better and faster execution of infrastructure projects.

There is still ambiguity regarding service tax applicability in several sectors of infrastructure. The Government should provide more clarity on it. Also, duty free import on construction equipment is only allowed for certain ADB and World Bank funded projects. This exemption should be extended to all the infrastructure projects."

Providing Growth

Mr Rajiv Mundhra, Director, Simplex Infrastructures Ltd, said: "The reduction in peak custom duty and excise duty will help create increased demand and provide growth to infrastructure sector. However, the challenges faced by players participating in the PPP and other infrastructures projects have not been addressed."

The Union Finance Minister, Mr P. Chidambaram, today proposed to hike the allocation for developing highways in the Budget for 2007-08 by more than Rs 700 crore. "I propose to increase the provision for the National Highway Development Programme from Rs 9,945 crore to Rs 10,667 crore next year," Mr Chidambaram said.

He also announced the setting up of a revolving corpus of Rs 100 crore to quicken project preparation.

More Stories on : Budget | Infrastructure | Roadways

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