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INDUSTRY UPDATE- FEB 29,2016 VOLUME:05

Jan 2017
Union Budget 2016-17 Key highlights of Budget 2016-17: • To double farmers' income by 2022 • New initiative to provide cooking gas to BPL families • Rs. 9,000 crore provided for Swach Bharat • Villages to be rewarded to discourage open defecation • Rs. 500 crore for Stand up India to promote entrepreneurship amongst SC, ST • To set up 1500 multi skilled training institutes, Rs. 1700 crore set aside for skill training institutes • To promote 100 model career centres by end of 1016 • Small shops will be allowed to remain open all seven days of week. Model Shops and Estabilishment Bill soon • Measures to speed up road construction: Rs. 55,000 crore allocated for roads and highways by 2017 • Amendment in Passenger Vehicles Act: Entrepreneurs will be allowed to operate buses/ fleet services • To open new greenfiled ports in Eastern and Western sector • Attempt to incentivise deep see gas exploration • Public Utility and Resolution Bills to streamline conflicts in infrastructure area; Credit rating system for infrastructure projects. • To allow firms to launch infra bonds worth Rs 31300 crore • Small airports and air strips to be developed for improving regional connectivity • Fiscal Deficit target 3.5%, revised revenue deficit target at 2.5% • New Bankruptcy code to be introduced in the Parliament in 2016 • Rs 25,000 crore for recapitalisation of PSU banks. • Debt recovery Tribunal will be strengthened • Aadhar made compulsory for availing social sector benefits • To introduce DBT in fertiliser on pilot basis • Tax rebate under Rs 5 lakh per annum • Tax rebate on rent ( HRA allowance) increased to Rs 60,000 from Rs 24,000 pa • 100% tax deduction for start-ups for first 3yrs • New manufacturing companies to be taxed 25% if not benefits availed • 40% of the Corpus of NPS withdrawn at the time of retirement to be tax free • To exempt affordable houses up to 60 sq metre from service tax • Levy on purchase of luxury cars • First time home buyer – Rs 50,000 deduction for upto Rs 30 lakh loan provided house cost not more than Rs 50 lakh • 1% infrastructure cess proposed with an attempt to curb pollution • 1% cess on petrol, CNG cars • Tobacco tax up from 10% to 15% • 2.5% cess on diesel, 4% on SUVs • Under reporting of income to be taxed more; deadline of September 30 to disclose undeclared income • No change in income tax slabs. M’shtra speeds up Rs. 30k-cr super e-way In its unfailing quest to match the infra deficit across the state, the state government in Maharashtra has placed the Rs 30,000-cr Mumbai-Nagpur super communication expressway on the fast-track and that the Maharashtra State Road Development Corporation (MSRDC) is taking up the project. The 800 km access controlled highway has been divided into five sections whereby the construction cost for eight lane expressway is estimated at Rs 30 crore per km which involves six lanes of super communication highway and two lanes of service roads, utility shifting, bypasses and other structures. The traveling time is expected to be reduced to eight hours from the current 16 hours. The project will be developed through engineering procurement construction (EPC) cum annuity basis. The consultants will have to prepare DPR in 40 weeks after that the MSRDC will start the construction work by end of 2016 and thereafter complete it in 27 months. The proposed expressway will be game changer as it will give a much needed boost to farming in the under developed Vidarbha, Marathwada and North Maharashtra regions. Highway sector gets Rs. 11,000cr upgrade In order to ensure trouble free travelling on the highways across the country, the transport ministry has set aside a staggering sum worth Rs. 11,000-cr to upgrade the 720 problematic spots across highways in the country, said transport minister, Nitin Gadkari, adding that for tackling the problem of traffic jams and accidents there is need for a Road Traffic Control system on the lines of Air Traffic Control and River Traffic Control which will use satellite based technology. Currently, about 5 lakh accidents take place in the country in which about 1.5 lakh people are killed every year. The target is to reduce accidents by 50% in next five years. About strengthening the network the total length of National Highways is planned to be increased to 2 lakh kms from the current 96000 kms and apart from this, a number of access controlled expressways are also coming up in the country and that e-tolling will be introduced at all toll plazas across the country. With this, vehicles will not be required to stop at the toll plazas for payment of toll and this will result in cutting down the huge pile up of vehicles at these plazas, which causes loss of about 1.5 % to 2 % to the GDP and also a sources of pollution, he added. Infra players await $ 3.1-bn funding infusion Ensuring smooth flow of funds for infra builders, the Macquarie Infrastructure and Real Assets (MIRA), a part of the asset management arm of Macquarie Group, has recently generated $3.1 billion to invest in infrastructure companies across Asia and a major chunk of the fund has been earmarked for investment in India. The investments will be made through its Asian regional infrastructure platform, which includes the Macquarie Asia Infrastructure Fund (MAIF), and specialist investment vehicles. The player started the fund-raising exercise for MAIF in 2014 considering that the Asian region provides a compelling investment environment for institutional investors. Strong fundamentals underpin the growing demand for real assets including infrastructure, such as rapid urbanisation and the push for sustainable development, said global head of MIRA, Martin Stanley, adding that the MAIF platform will be focused on investment opportunities in transportation, communications, utilities, power, energy and waste management assets across regions and in the recent past MIRA invested Rs. 780-cr in IBPIL, a Hyderabad-based power generating player. Odisha plans Rs. 904cr infra projects In its quest to build the world class infrastructure across cities in the area, the state government in Odisha has recently decided to spend Rs 904-cr on the development of urban infrastructure. The targeted projects included water supply, construction of market complexes and vending zone and improvement of drainage system and solid waste management system. Odisha Urban Infrastructure Development Fund (OUDIF) spearheaded by chief secretary A P Padhi would implement the projects via urban local bodies, special secretary of the housing and urban development department, S K Ratho said adding that the government will avail the amount from KfW Bank, Germany as loan and will pass it on to civic bodies as grant. In this connection, a high level meeting headed by the chief secretary approved a project for improvement of water supply to greater Berhampur (Berhampur, Chhatrapur and Gopalpur) worth Rs 489-cr as the silk city currently facing acute drinking water crisis. The state government also approved a comprehensive sewerage system and a sewerage treatment plant for Rourkela after it has been elevated as a municipal corporation in 2013. In addition, the state has also decided to build two modern wet markets in the city (one at Ghatikia and another at Unit-IV market). Two vending zones in Cuttack, a market complex at Udala notified area council in Mayurbhanj district and another at Patrapada in Sundargarh are also planned under OUDIF, said sources.

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