Presentation of business environment

on
budget 2011-12
on
Infrastructure

by Amit Gupta
003/jkbs/pgdm-10
 Infrastructure
• An allocation of Rs 1,735.52 bn provided for
infrastructure development, which accounts
for over 46% of the total plan allocation

• An allocation of Rs 167.52 bn provided for

Railways, which is about Rs 9.50 bn more than
last year.
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Mono Rail Projects for urban transport are being

granted project imports status under Heading No. 98
01 and would accordingly attract concessional rate of
5% basic customs duty.
• Deduction of an additional amount of Rs 20,000
allowed, over and above the existing limit of Rs 0.1
mn on tax savings, for investment in long-ter
infrastructure bonds as notified by the Central
Government.
 Roads and Highways
• Allocation for road transport increased by over 13% from
Rs 175.20 bn to Rs 198.94 bn.
• An allocation of Rs 7 bn for development of National
Highways under Border Roads Organisation
• Specified road construction machinery items are presently
fully exempt from customs duty subject to specified
conditions. Sale or disposal of such machinery items at
depreciated value is being allowed on payment of customs
duties on depreciated value at the rates applicable at the
time of import subject to specified conditions.
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An allocation of Rs 17.50 bn for Special Accelerated
Road Development Project in the North Eastern
Region.
• An allocation of Rs 94.72 bn for National
Highway Authority of India.
• An allocation of Rs 2.30 bn for Inter-State and
Economically Important Roads in different States and
UTs.
• An allocation of Rs 45.75 bn for Development of
National Highways.
 Rural Infrastructure
• Rs 661 bn provided for Rural Development.
• An amount of Rs 480 bn allocated for rural
infrastructure programmes under Bharat
Nirman.
• Unit cost under Indira Awas Yojana increased
to Rs 45,000 in the plain areas and to Rs
48,500 in the hilly areas. Allocation for this
scheme increased to Rs 100 bn.
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• An allocation of Rs 100 bn for providing
assistance to rural BPL households for
construction of houses (and upgradation of
Kutcha houses) under Indira Awaas Yojana.
• An allocation of Rs 120 bn for providing
connectivity to eligible unconnected rural
habitations through good all-weather roads.
 Urban Infrastructure
• Allocation for urban development increased
by more than 75% from Rs 30.60 bn to Rs 54
bn in 2010-11.
• Allocation for Housing and Urban Poverty
Alleviation raised from Rs 8.50 bn to Rs 10 bn
in 2010-11.
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• Allocation of Rs 12.70 bn for Rajiv Awas Yojana
as compared to Rs 1.50 bn last year.
• An allocation of Rs 9.95 bn for Equity
Investment towards Infrastructure
development of‘Mass Rapid Transit System’.
• An allocation of Rs 2 bn for development of
Satellite Cities/Counter Magnet Cities.
 Positive+
• The plan allocation for the infrastructure sector of around 46% of the total
plan allocation points
• toward a continued thrust on the infrastructure sector provided by the Union
budget FY11. The
• increased allocation for NHDP programme and railways along with granting
the project imports
• status to Mono Rail Projects for urban transport and allowing the resale of
certain road construction
• machinery is expected to provide an impetus to the transportation sector.
Tax deduction provided
• for investment in long-term infrastructure bonds notified by the Central
Government is likely
• to promote savings and direct resources towards infrastructure development
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• The substantial
• increase in allocation for Rajiv Awas Yojana (RAY),
which aims to create a slum free India at the
• earliest, is likely to play a pivotal role in urban
infrastructure development. The infrastructure
• sector is likely to benefit from the substantial
increase in budgetary allocation for infrastructure
• both rural and urban. Increase in MAT from 15%
to 18% could be a dampener.