Budget Talks – 2010-11

Sector: Infrastructure
 Budget Initiatives – The Positives

• Additional deduction of Rs 20,000 to be allowed for tax

savings, for investment in long-term infrastructure bonds

• Rs 173,552 cr provided for infrastructure development - over

46% of the total plan allocation

• Allocation for road transport increased by over 13% from

Rs 17,520 cr to Rs 19,894 cr

• Rs 16,752 crore provided for Railways, which is about Rs 950

crore more than last year
 Budget Initiatives – The Positives

• Continued takeout financing and refinancing plans of IIFCL

(setup last year)
• Payment of import duty at depreciated value on resale of
machinery for road construction projects

• ‘Monorail projects’ to be allowed a reduction of basic import

duty by 5%
• One time interim relief to the housing & real estate – pending
projects to be completed within 5 yr period instead of 4 for
claiming a deduction of their profits
 Budget Initiatives – The Negatives

• MAT increased from 15% to 18%

• Central Excise Duty raised from 8% to 10% on all

non-petroleum products
 Impact on Housing and Real Estate

Overall Positive

• Higher allocations and improved funding to increase orders

• Continued takeout financing & refinancing plans of IIFCL will be
beneficial
• Additional personal tax savings in infra projects to be beneficial

• Hike in MAT will have a marginally negative impact

• Increase in excise duty of cement and other materials to increase
construction cost
 Impact on Roads Construction

Overall Neutral

• 13% higher budget allocation to be beneficial

• Additional personal tax savings to be beneficial
• Payment of import duty at depreciated value on resale of
machinery for road construction projects to be beneficial

• Rise in MAT to be detrimental

Impact on Ports & Airport Infrastructure

Overall Negative

• Rise in MAT to be detrimental

• Additional personal tax savings on investment in long-term

infra bonds to be beneficial
Thank You