Private firms can issue infra bonds: Pranab

Finance Minister Pranab Mukherjee on Friday said power deficit was holding back the country’s growth and capacity addition was the need of the day.

Finance Minister Pranab Mukherjee on Friday said power deficit was holding back the country’s growth and capacity addition was the need of the day. Speaking at the conference organised by the Planning Commission on infrastructure development, Mukherjee said the power distribution segment was an area of concern.

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With a view to providing the much required fillip to the infrastructure sector, Mukherjee said that the private sector will be allowed to raise resources by issuing long-term infrastructure bonds carrying tax benefits. “It (the proposal to issue long-term infrastructure bonds) will of course be for the private as well as public sector.”

Budget 2010-11 has proposed to exempt investment of up to Rs 20,000 in long-term infrastructure bonds from income tax. The amount would be in addition to the existing annual tax exemption limit of Rs 1 lakh provided to personal income tax payers.