The Budget 2012-13 aims at sprucing up the country?s infrastructure and readying it for higher growth. Stalwarts from the construction equipment industry respond to the budget.

Vipin Sondhi, MD & CEO, JCB India
My initial reaction is that initiatives like liberalising the External Commercial Borrowing (ECB) rules and boost to investment, particularly in infrastructure sector, relief in indirect taxes to sectors under stress; viz. infrastructure, manufacturing, mining, roads,?get duty relief are a few positive signals.
Also the outlay for infrastructure of Rs 50 lakh crore in 12th Plan is another step towards growth with encouragement to the private sector. However, the excise-related proposals would push up prices thereby putting further pressure on an already difficult demand position.

Anand Sundaresan, MD, Schwing Stetter India
There are a lot of positive points to boost the infrastruct?ure industry like ECB on low cost housing, irrigation and dam projects.
The announcement of the Delhi-Mumbai freight corridor with the Japanese investment of $4.5 billion is a good boost for the infrastructure industry. The implementation of 8,800 km of National Highways will be an advantage to the industry. Many sops have been given for the development of power sector. These are some of the positive indicators towards the thrust on infrastructure development. The most important will be to implement them on time. Many projects have been identified and are waiting for bureaucratic clearance or land acquisitions. Clear policies and reforms should be made for faster implementation of these infrastructure projects.
The infrastructure industry and construction equipment manufacturers are looking at the big chunk coming out of the $1 trillion investment on infrastructure proposed in the 12th Five Year Plan. Out of this, 50 per cent has to come through Public Private Partnership (PPP) projects as against 30 per cent in the 11th Plan. We have not achieved the PPP target of the 11th Plan period. Therefore, if the government wants to attract the private investors for the PPP projects, the necessary reforms and policy changes should be brought in immediately.

AM Muralidharan, MD, Volvo India
The Union Budget 2012-13 has turned out well overall for the infrastructure industry. The Finance Minister has proposed good steps bringing cheer to the infrastructure and equipment manufacturering segment.
The government?s plan to invest Rs 50,000 crore in infrastructure will encourage more projects on PPP model for massive infrastructure development. The signs for the road construction segment are very promising considering the government?s plan to invest Rs 10,000 crore and introduce external commercial borrowing. It has planned 8,800 km of road construction, which will provide more avenues for projects.
The implementation of the GST model will be watched carefully. With the government still in consultation with different states, we hope to see a practical road map for GST by August. This will be a huge boost for equipment manufacturers as it will reduce taxes on sales of equipment between states.
The mining sector has also seen some very bright spots with the exemption of customs duty on coal. I believe this is one of the high points of the budget since mining companies will look at venturing into newer projects. Another key point which will have a positive impact on equipment companies is the reduction of tax on iron ore equipment from 7.5 to 2.5 per cent.
Overall the budget resonates well with the verticals we cater to. In the coming year, I hope to see positive developments in the equipment manufacturers industry.

Sumit Mazumder, Vice Chairman & MD, TIL
Budget 2012-13 is realistic and ?do-able?. It as a well balanced budget that gives a positive direction for the country, setting the pace for what to expect in the years to come. Emphasis on infrastructure by giving Rs 60,000 crore on infrastructure bonds is a very positive step towards making our country a part of the global economy. Good infrastructure is essential to attract foreign investments, grow industrial activity and provide a good quality life.
The focus on education and skill building and allocation of Rs 1,000 crore for national skill development fund is another positive step towards bridging the skill gap and enhance employability. Inclusive growth cannot be achieved by continuously providing subsidies.
Early implementation of the DTC and GST is also advocated which will help the current scenario to a large scale. Active consideration in FDI in aviation and multi brand retail is encouraging news.

Sanjay Chamria, Vice Chairman & MD, Magma Fincorp
Although the budget was without any substantial reforms, government?s commitment to go ahead on the path of fiscal consolidation is a step in the right direction. There were no definitive steps to control the ballooning subsidy bill, however, the FM has targeted to keep central subsidies under 2 per cent of GDP in 2012-13, which if achieved, would be commendable.
The focus on infrastructure with a targeted investment of Rs 50 lakh crore under the 12th plan is a positive. The FM has provided further boost to low cost affordable housing with measures like opening up of external commercial borrowings, setting up a credit guarantee trust fund for housing loans, continuation of interest subvention scheme of one per cent, enhancement of limit of indirect finance under priority sector from Rs 5 lakh to Rs 10 lakh and exemption of construction services for residential dwelling and low cost mass housing from service tax net. This will help boost the sector as well as related sectors like cement, steel and financial services.
The increase in service tax and standard excise duty rates from 10 per cent to 12 per cent were expected. These would however, further impact the industry which is already under pressure from high interest rates. Although lower fiscal deficit target of 5.1 per cent is positive, we would like to see further steps to improve liquidity and reduce interest rates for private sector including AFCs.
While overall the budget has moved in the direction of reducing fiscal deficit, more credible steps on reduction in subsidies to help reduce inflation, lower interest rates and increase the growth in the economy would be our expectations from the government going forward.

Hemant Kanoria, Chairman and MD, Srei Infrastructure Finance
The Finance Minister has presented a budget aimed at sprucing up the country?s infrastructure and readying it for higher growth. Bes?ides enhancing sectoral allo?cations, the doubling of the amount of tax free bonds to be raised for infras?tructure in FY13 will go a long way in capacity augmentation in roads, power, railways, housing, ports, etc. Expanding the scope of Viability Gap Funding and including various segments of agricultural infrastructure, telecom and also including oil and gas related infrastructure is also welcomed. The minister has rightly identified the criticality of external commercial borrowings (ECB) in infrastructure financing and to that end has rightly allowed ECB financing to play a larger role in sectors like roads, power, railways, housing, mining, etc. However, the minister has not mentioned anything on raising the annual cap of $30 billion that now applies for ECB in India. In addition, customs duty reduction on a number of items and equipment pertaining to sectors like road, power, mining, shipping, aviation, cold chain, agriculture, etc, will go a long way in benefiting India?s infrastructure. Reducing the withholding tax rate on ECB from 20 to 5 per cent for three years for select sectors is another big positive for infrastructure sector.
With $1 trillion investment envisaged for infrastructure in the 12th Five Year Plan and 50 per cent of it to come from private sector, this budget was expected to create an enabling environment for raising long term debt and equity from both domestic and overseas markets. While the issue of tapping overseas resources was addressed to some extent, there was no initiative to channelise the domestic long term funds into infrastructure. Also prior announcement on extension of tax incentives, depreciation benefits, etc, for different sectors help private sector to plan their investments. We hope the government will address these issues in the coming days.

Amitabh Das Mundhra, Director, Simplex Infrastructures
We welcome the slew of incentives announced by the Finance Minister, which spelt out robust plans and growth-oriented measure by the govern?ment for the infrastructure sec?tor. Giving clear direction to?wards boosting investments in the sector, the minister has announced its intent of raising Rs 50 lakh crore in the 12th Five Year Plan. We as an infrastructure company welcome the minister?s proposal for the road sector, from targeting 8,800 km of road projects to announcing full exemption on imported equipment for road construction projects. This will have a hugely positive impact on the sector. Further, increased allocation of 14 per cent towards the NHDP is well appreciated.

The announcement of liberalising external commercial bo?rro?wings will ensure smooth access to the funds and provide us the impetus to bid for more projects. Doubling of infra?structure bonds from Rs 30,000 to Rs 60,000 crore is a well thought out move for mobilising the resources in the sector. The only dampener for the infrastructure sector would be the increase in the service tax from 10 to 12 per cent and hike in excise duty to 12 per cent. This negatively affects the gro?wth prospects of the sector and can further result in higher costs for us.

Tushar Mehendale, MD, ElectroMech
Overall the budget is a tepid one with no big-bang measures that ensure the promised high growth trajectory that India has been waiting for patiently for the past couple of years. Although it has been promised that the GST will be effective in August 2012, it should not eventually turn out to be another failed promise as has happened in the past. Allowing of ECB in sectors like road construction and the target for highways development in FY13 is a good development.

Raja Kochar, MD ? India, Eaton Corporation
We see it as a status quo budget. We were looking for more concrete initia?tives that could quickly propel India?s growth and more specifically, increase manufacturing from 16 to 25 per cent of GDP. We hope the government can progress on the implementation towards GST and early enactment of DTC to make this a truly favourable budget. The amendment to Section 9 (transfer of shares) is a cause of concern for Eaton and other MNCs doing business in India.