Infrastructure in India

Dewan P.N. Chopra Consultants Private Limited

The Indian Infrastructure Sector
An Overview

Prepared By:
Dewan P.N Chopra Consultants Private Limited.
H-57 Connaught Circus New Delhi-110001
Ph: 24645891, 92, 93
E-mail: dpnc@dpncindia.com
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Dewan P.N. Chopra Consultants Private Limited

The Infrastructure Sector
General Overview
Over the past four years, the Indian Economy consistently recorded growth
rates in excess of 8.5% per annum resulting in rapidly increasing infrastructure
spending. Total infrastructure spending is expected to increase from
US$ 24 billion in 2005 to US$ 47 billion in 2009. (FICCI)
Total investment requirement in the infrastructure sector over the next five
years is US$ 445 billion

Funding Gap in US$ billions

Others, 80
Airports, 9

Pow er, 143

Pow er, 19
Telecom , 47
Railw ays, 66

Roads, 81

Source: IDFC

It is estimated that the Infrastructure Sector needs to grow at a CAGR of 15%
over the next five years to support the growing requirements of virtually
every other sector of the Indian Economy.
With the objective of stimulating and mobilizing increased private sector
investments, either from domestic sources or foreign avenues, the government
has offered various incentives:

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Dewan P.N. Chopra Consultants Private Limited

Liberalization of FDI Regulations
i. Barring aviation, 100% FDI under the automatic route is now
permitted in all infrastructure sectors.
ii. FDI under the automatic route is permitted up to 49% - 100% for
various services in the aviation sector.
Source: DIPP

Extended tax holiday periods
Under section 80-IA of the Income Tax Act, 1961, a ten year tax holiday
is available to enterprises engaged in the business of development,
operation and maintenance of infrastructure facilities, subject to compliance
with the conditions prescribed therein.
Introduction of Public Private Partnerships (PPP)
Based on resounding global success, the government has introduced the
concept of public-private partnerships in India, to...