A Subba Rao, group chief financial officer of  GMR Infrastructure tells CNBC-TV18 that the customs duty reduction will help save 10% cost on coal imports.

He further adds that the FM has tried to address most of the issues in the Budget.
Speaking about the ECB option allowed to infra companies this Budget, Rao says various issues will be addressed before ECB money is considered as an option. "It is likely to come in only after the domestic issues are solved," he said.
Below is an edited transcript of his interview. Also watch the accompanying video.

Q: How much has the Budget has positively impacted a company like yours. You get some depreciation benefits, isn't it? Can you just detail what it would mean to P&L?

A: Budget cannot address all the issues of power sector or the airport sector. But Budget has delivered what it can do. In the case of the power sector one of the most painful issues over the years is the dividend distribution tax issue. The kind of structure that we have in infra business, there is a top holding company, then a middle holding company, then the project companies. By the time the project money goes to the top holding company most of the cash flow is stripped off by way of dividend distribution tax. Now that has been plugged in and only one company in the entire chain faces the dividend distribution tax. All that we lose is only 20% of the entire dividend payment by way of taxes that is fair enough. This is one big benefit that has accrued from the Budget.
Apart from this, Budget has recognized that there are certain issues in the power sector which has to addressed, thus waived off the import duty on the coal and the gas. It has extended the holiday. It has recognized that the domestic availability of the capital particularly the debt capital is slow and low. There are certain issues with the banks, their caps and it has opened the ECB route. We have to wait for the fine print how it is going to be delivered finally for the sector. But these problems have been recognized. So to the extent the Budget would solve the issues, address the issues, the Budget has done it. But outside the Budget a lot more needs to be done to address all the issues of the power sector.

Q: With regards to the Budget then, any immediate impact that we could see on the P&L balance sheet of the company?

A: Yes, the dividend distribution tax is the side benefit which saves lot of tax leakage to the government in the dividend distribution. Apart from this there is a reduction in the import duties on coal, fuel and gas. Whoever is importing to that extent there would be improvement in the profitability of those companies because that much cost is saved.

Q: What about the 20% depreciation on power equipment? Does that help?

A: I am not sure about this. I have not gone through the fine print as to how it is going to impact.

Q: But does the tax holiday extension help you? Are you getting any projects coming up anytime soon which will benefit from this extension?

A: Yes, year-after-year, the government has been extending one year. So the projects which are getting commissioned in the current financial year would benefit from this.

Q: How much of direct coal imports do you make? With duty reduction or nil duty, what is the quantum that you actually import and therefore what's the likely benefit?

A: As of now we don't have any coal imports because we don't have any commissioned projects in the coal segment. However, in the next six months we are commissioning significant capacity. So if the domestic coal is not available to that extent then we have to import the coal. To extent of the import that we are going to make it would reduce the cost by about 10%.