Budget impact on energy & infra sector: BMR Advisors view

The Economic Survey 2009, followed by the policy announcement in the Budget, encourages long standing need for policy reforms for the downstream oil & gas sector and promises thrust for infrastructure growth. The tax proposals are a mixed basket for the energy and infrastructure sectors - there is welcome relief with extension of corporate tax holiday for power, refining sectors and to natural gas under New Exploration Licensing Policy ("NELP") VIII. This is counter balanced with the replacement of the tax holiday for pipelines with an accelerated deduction for specified capital expenditure, and the unresolved ambiguity for tax holiday for natural gas from

existing blocks. The proposal for retrospective change in the tax holiday provision for upstream sector will be a cause of concern.

 

For the complete report, see the attachment