BMR's Budget 2013-14 Analysis: Infrastructure

In sync with the mool mantra of "higher growth leading to inclusive and sustainable development", Budget 2013 has introduced measures to provide impetus to the infrastructure sector, which continues to remain at the core of the economy.

Growth rate of an economy is correlated with the investment rate, both domestic and foreign, which was recognised as an imperative by the Finance Minister given that the infrastructure sector clearly needs large volume of investment. Accordingly the emphasis is on policy measures to speed up approvals and reduce bottlenecks in implementation of infrastructure projects, incentivise investments in manufacturing sector, seek private sector participation, introduce innovative instruments for mobilising funds and augment natural resources such as waterways and ports. Having recognised the role that the infrastructure sector plays in terms of overall growth, key changes have been introduced in respect of some of the policy related issues apart from introducing investment linked incentives on the direct tax front and exemption of certain imports on the indirect tax front. Clearly having set the roadmap, what needs to be seen is the effective implementation of the policy measures introduced. This report by BMR summarizes the key policy pronouncements and tax proposals relevant to the Infrastructure and Real Estate sector.

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