Budget likely to give boost to infrastructure sector

Finance Minister Pranab Mukherjee is likely to announce steps to boost the infrastructure sector in his Budget tomorrow with a view to sustaining over 9 per cent growth in the coming years. The initiatives could include raising the limit for investment in tax saving infrastructure bonds and providing special thrust to plan expenditure for sectors like road, energy, ports, airports etc.

Currently, investments up to Rs 20,000 per annum in infrastructure bonds enjoy tax exemption.

Mukherjee may also announce setting up an Infra Debt Fund (IDF), as was suggested by an expert panel headed by HDFC chief Deepak Parekh in June, 2010 to resolve financing issues of the sector.

The Parekh Committee had recommended setting up IDF with an initial corpus of Rs 50,000 crore for financing projects in this crucial sector and was to be managed and regulated by market regulator SEBI.

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