Infra Budget wishlist: Govt should stick to policies
February, 04th 2012
A trillion dollars in infra spending over the next five years with almost half coming in from the private sector, this is the government's great Indian infrastructure dream but the ground reality is a rude awakening. With a slowing economy, high interest rates and more importantly delayed decision making, infra projects and infra companies face an uncertain future.
Here's a snapshot of infrastructure sector's budget wishlist The infrastructure industry too has a long set of expectations from the budget. Rajiv Lall of IDFC says a key issue lies with withholding taxes in the mutual fund side of infra debt funds.
"One of the glitches is to do with getting off the ground the much talked about infra debt funds. There are issues with respect to withholding taxes that need to be taken care of. They have been partially taken care of in the announcement to date. But there are two structures in the IDF. One is an IDF NBFC. The other one is the IDF mutual fund. So the NBFC withholding tax issues have been more or less taken care of. In the MF structure, they have not. So it would be useful to give fillip to that initiative if that were addressed," he said.
GMR's A Subba Rao asks the government to stick to their word. "There has been a trust deficit. You [government] say something today and you go and change tomorrow," he said adding, "So whatever they do, we make investments depending on government's statements. When we started there was not MAT etc. All these things over a period of time have been rolled back and impairing our investments."
And CII's Vinayak Chatterjee says there is a need to make investors feel secure while investing in infrastructure. "Infra space is money hungry, so basically you need a lot of money to come into the sector and money will come in only when people in this who are investing, feel safe to invest money. I think the policies have to be long-term. They can't be changed now and then. What I expect is that, like MAT, this is something which we should exempt the infra companies from MAT," he said.