The government's decision to extend the 10-year tax holiday benefit by another three years to power companies is being welcomed by power producers.
The new date for projects to avail the benefit is now March 31, 2017. Power companies can claim tax exemption for up to 10 years within the first 15 years of a project's operations. Last year, the government extended the scheme until March 31, 2014.
"I am elated at the announcements," said power and coal minister Piyush Goyal. "This is a transformative budget focussing on policy initiatives and heavy emphasis has been laid on investment-led growth."
The Association of Power Producers (APP), a body representing leading power producers in India, said the extension of the 10-year tax holiday would provide a significant boost in investor interest in the sector, while also benefiting the end consumer.
Dr GVK Reddy, founder chairman and MD, GVK Power and Infrastructure Ltd, says that the measures indicate "the government's recognition of the fact that a strong foundation of infrastructure can only help realise a country's economic growth".