Pranab unveils slew of measures to spur infra investment
Finance Minister Pranab Mukherjee on Monday announced a slew of measures to boost investment in the infrastructure sector with a view to propel the economy on an over 9% growth trajectory in the coming years.india Updated: Feb 28, 2011 13:04 IST
Finance Minister Pranab Mukherjee on Monday announced a slew of measures to boost investment in the infrastructure sector with a view to propel the economy on an over 9% growth trajectory in the coming years.
The measures include the issuance of tax-free bonds worth Rs 30,000 crore and extending income tax exemption on tax-saving infrastructure bonds up to a maximum of Rs 20,000 for one more year.
Presenting the Union Budget for 2011-12, Mukherjee said the government intends to spend Rs 2.14 lakh crore as budgetary support for the infrastructure sector in 2011-12 and will set up an infra debt fund to promote foreign investment in the sector.
"We will introduce special infrastructure debt funds to attract foreign financing in infrastructure," he said.
Mukherjee said the Indian Railways Finance Corporation (IRFC) and National Highways Authority of India Limited (NHAI) will issue tax-free bonds of Rs 10,000 crore each, while tax-free bonds worth Rs 5,000 crore each will be issued by HUDCO and the port sector, respectively.
He also announced that foreign portfolio investment would be permitted in SEBI-registered mutual funds and hiked the FII investment limit by an additional $20 billion for investment in infrastructure-related sectors.
With this step, he said that FIIs will be eligible to invest up to $40 billion in corporate bonds, including a total of $25 billion in the infrastructure sector.
Mukherjee also said the government has kept a target for spending Rs 2.14 lakh crore in the infrastructure sector, accounting for about 48.5% of Gross Budgetary Support of total plan expenditure.
The Finance Minister added that Indian Infrastructure Finance Company Limited (IIFCL) will disburse loans worth about Rs 20,000 crore by the end of this fiscal for investment in the infrastructure sector.
Mukherjee added that IIFCL is expected to disburse loans of about Rs 25,000 crore in the next fiscal.
He also said that cold storage chains will be given infrastructure status.