Though the Union Budget 2012-13 is not considered to be much of a game changer, it augurs well for the infrastructure and equipment manufacturing segments. The enhancement of sectoral allocations, doubling of the amount of tax-free bonds to be raised for infrastructure in FY13, are expected to give a boost in capacity augmentation in roads, power, railways, housing, ports, etc. The government?s plan to invest Rs 50,000 crore in infrastructure will encourage more projects on the PPP model for infrastructure development. The announcement of the Delhi-Mumbai freight corridor with Japanese investment of $4.5 billion is a considerable boost for the infrastructure industry. The signs for the road construction segment are very promising too, considering the government?s plan to invest Rs 10,000 crore and introduce external commercial borrowing, too. It has planned for 8,800 km of road construction, which will provide more avenues for projects, which in turn, will be a growth-enabler for the CE sector.

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 benefitting India?s infrastructure. The mining sector has also seen some bright spots with the exemption of Customs duty on coal. Another key point which will have a positive impact on equipment companies is the reduction of tax on iron ore equipment, from 7.5 per cent to 2.5 per cent. Now the industry is looking forward to the implementation of GST that will be a huge boost for equipment manufacturers as it will reduce taxes on sales of equipment between states.

Overall, these are all positive indicators towards the thrust on infrastructure development. However, the most important move, as per industry captains, would be to implement all of this 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.

Fifty per cent out of this has to come through public- private partnership projects as against the 30 per cent that was in the 11th Five Year Plan. As statistics indicate, we have not achieved the PPP target of the 11th Five Year Plan; therefore, if the government wants to attract private investors for PPP projects, the necessary reforms and policy changes should be brought in immediately.

The budget has reinforced its commitment to 'infrastructure' and kept on course. The devil lies in the execution which has been tardy and on slow track. However, some initiatives by the PMO in sorting out the fuel issues for power companies and the incentives provided for in the budget will create some momentum as the budget proposals sink in.