FM hints at tax sops for core sector

There are firm indications now that the income tax act may be amended to restore tax exemptions enjoyed by investors on infrastructure project investments. By including section 10 (23)G in the Finance Bill, Sinha had lifted the tax exemptions on long term capital gains and dividend accruing to investors. This resulted in all round protests in the corporate world. A number of representations against the measure were received by the finance ministry as a result.

Sinha’s disclosure came following a pointed question by his predecessor P Chidambaram whether hewould amend the relevant section in the light of the protests from the corporate sector. Chidambaram argued that the measure would be a dampener so far as private sector investment in the infrastructure development was concerned.

Replying to supplementaries, the finance minister was emphatic that the infrastructure sector would not be allowed to starve of funds and that the Government would take all possible measures to procure necessary resources for the purpose.

The Finance Minister also disagreed with some members that the sanctions imposed on India in the wake of the recent nuclear tests would adversely affect the infrastructure sector. He declared that not a single infrastructure project in the country would be affected for lack of funds, drawing applause from the treasury benches.

Stating that the government was constantly reviewing the situation on the resources front, the finance minister said already a number of measures had been taken to augment private sector investment in the infrastructuredevelopment.

Giving an example to prove his point, the finance minister said all the fast track power projects waiting for certain clearances for the past five years have been given go ahead by the present government. He said he himself took meetings recently to clear counter guaranteed of these projects. By the month-end , all remaining clearances on counter guarantee would be issued by the government, he added.