In a big push for infrastructure, the budget for 2013-14 outlined steps to raise Rs. 50,000 crore via tax-free bonds, a plan to set up major ports and a regulator for road-building.
Chidambaram said there was need to create 'new and innovative instruments to mobilise funds' to meet infrastructure demand. The FM also announced an incentive allowance of 15 % above permitted depreciation to those investing more than Rs. 100 crore in infrastructure projects.
India needs around Rs. 55 lakh crore to build infrastructure projects over the next five years. The Centre also plans to award contracts to build 3,000 km of roads in first six months of 2013-14.
Under a budget proposal, the India Infrastructure Finance Corporation Ltd, with the Asian Development Bank, will offer credit enhancement to infrastructure firms wishing to access bond market for long term funds.
The FM eased taxes for interest earned by non-resident Indians on rupee-denominated long term infrastructure bonds. Last year, tax rate on interest was cut to 5% from 20% for foreign currency-denominated bonds.
"Budget 2013 gives an increased focus on infrastructure sector but there is a long way to go," said Vishwas Udgirkar, senior director, Deloitte.
The FM said work on two industrial corridors from Bangalore to Chennai and Bangalore to Mumbai has begun.