Budget Impact on Infrastructure Sector

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Budget Impact on Infrastructure Sector

The Budget 2017 laid emphasis on the infrastructure sector as well. The last three budgets have made it clear that the government has finally realized the importance of focussing on the infrastructure sector as well.

This year the expectations regarding the infrastructure were high from budget 2017 and the expectations were met. Infrastructure mainly roads and railways remain at the forefront of the budget. A budget of Rs 3.96 lakh crore was allocated to the sector which is 10% over  FY17 revised estimate.

Apart from an increase in the budget, the rural road construction work will accelerate to 133 Km/day. Also, affording to the house has been given an infrastructure status. The lock-in period for long-term capital gains on land and buildings has been reduced from three to two years. Customs and excise duties cut on machinery, parts that are used to manufacture solar power project components.

Impact of Budget on Infrastructure Sector

  • The impact of the budget on infrastructure sector is that we can expect a lot of development work to start soon. The Indian investors will be happy with new projects that will come in the market.
  • Road construction firms will get fresh tenders and road projects.
  • The companies that carry out civil work and offer track laying and electrification service will benefit.
  • Incentives for affordable housing can step up supply. The rational and lower cost will improve project viability.
  • The transactions in land and property will also increase enabling people to move on from real estate assets to liquid assets.
  • The impetus to solar machinery supports indigenization, could bring down costs of solar energy eventually.

The budget makes sure that the public-private partnership in all infrastructure sectors will be encouraged. The Minimum alternate tax credit extension from 10 years to 15 years partially offsets the impact of phasing out of incentives to the infrastructure sector. The reduction of 5% on interest income of foreign currency borrowings and masala bonds has assets to 2020. assets make foreign financiers look at investments in the energy and infrastructure sector more positively.

The budget 2017 provides an opportunity to give a proper push to the infrastructure sector to grow. This will also help in the economic growth and progress that is required to create a truly business-friendly environment in India.