Indian Budget 2013 and Logistics Industry Logistics Industry related Budget provisions a) Govt has decided to constitute a road authority for the road sector. b) 3000 kms of road project to be awarded in the first six months of 2013 c) Two new major ports will be established in Sagar, West Bengal and in Andhra Pradesh to add 100 million tonnes of capacity. In addition, a new outer harbour will be developed in the VOC port at Thoothukkudi, Tamil Nadu through PPP at an estimated cost of `7,500 crore. When completed, this will add 42 million tonnes of capacity. d) Five inland waterways have been declared as national waterways. The Minister of Water Resources will move a Bill in Parliament to declare the Lakhipur – Bhanga stretch of river Barak in Assam as the sixth national waterway. Preparatory work is underway to build a grid connecting waterways, roads and ports. The 12th Plan has an adequate outlay for capital works, including dredging, on the national waterways. The objective is to choose barge operators, through competitive bidding, to transport bulk cargo on the national waterways. The first transport contract has been awarded in West Bengal from Haldia to Farakka. e) While every sector can absorb new investment, it is the infrastructure sector that needs large volumes of investment. The 12th Plan projects an investment of USD 1 trillion or `55,00,000 crore in infrastructure. The Plan envisages that the private sector will share 47 percent of the investment. Besides, we need new and innovative instruments to mobilise funds for this order of investment. Government has taken or will take the following measures to increase investment in infrastructure: a. Infrastructure Debt Funds (IDF) will be encouraged. These funds will raise resources and, through take-out finance, credit enhancement and other innovative means, provide long-term low-cost debt for infrastructure projects. Four IDFs have been registered with SEBI so far and two of them were launched in the month of February,2013. b.India Infrastructure Finance Corporation Ltd (IIFCL), in partnership with the Asian Development Bank, will offer credit enhancement to infrastructure companies that wish to access the bond market to tap long term funds. c.In the last two years, a number of institutions were allowed to issue tax free bonds. They raised `30,000 crore in 2011-12 and are expected to raise about `25,000 crore in 2012-13. I propose to allow some institutions to issue tax free bonds in 2013-14, strictly based on need and capacity to raise money in the market, upto a total sum of `50,000 crore. d.Multilateral Development Banks are keen to assist in efforts to promote regional connectivity. Combining the ‘Look East’ policy and the interests of the North Eastern States, I propose to seek the assistance of the World Bank and the Asian Development Bank to build roads in the North Eastern States and connect them to Myanmar. e.NABARD operates the Rural Infrastructure Development Fund (RIDF). RIDF has successfully utilised 18 tranches so far. I propose to raise thecorpus of RIDF-XIX in 2013-14 to `20,000 crore.Pursuant to the announcement made last year, a sum of `5000 crore will be made available to NABARD to finance construction of warehouses, godowns, silos and cold storage units designed to store agricultural produce, both in the public and the private sectors. This window will also finance, through the State Governments, construction of godowns by panchayats to enable farmers to store their produce. f.The Finance Bill 2013-14 proposes reduction of tax on interest in respect of investment made through a designated bank account in Rupee dominated long term infrastructure bond from 20 percent to 5 percent. g.The Finance Bill 2013 proposes to provide parity in taxation between an IDF-Mutual Fund that distributes income and an IDF-NBFC that pays interest when the payment is made to a non-resident. The rate of tax on such distributed income or interest will be 5 percent. (IDF – means Infrastructure Development Fund). The rate of tax on interest paid to non-resident investors was reduced last year from 20 per cent to 5 per cent.
Posted on: Fri, 12 Jul 2013 15:00:26 +0000
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