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Budget 2010-11: Construction India is on the verge of witnessing a sustained growth in infrastructure buildup. With a slew of announcements in housing, road, port and airport development, we are seemingly on a path of sustained recovery in infrastructure construction in the country. As infrastructure plays a vital role in the Indian economy, many experts believe that in order to go to a double digit growth path in the future, investments in the infrastructure sector should be increased. Given Rs 1,735 bn earmarked for the infrastructure development in FY 2011, we believe this a step in the right direction. Income of the companies engaged in infrastructure development was exempt from tax under section 80-IA for 10 consecutive years which is about to expire in March 2010. Although non-extension of this tax holiday for another term proved to be a dampener, we are excited about the road map laid down for the sector as a whole from an economic standpoint.

Budget Measures Government earmarks Rs 1,735 bn for infrastructure development Road development expenditure allocation increased to Rs 198 bn Target to build 20 km of highway each day IIFCL to double refinancing to banks lending to infrastructure companies Approximately Rs 661 bn allocated for rural development Interest rate subsidy for affordable housing extended till FY 2011 Developers allowed to complete housing projects in 5 years (extended by a year) to avail tax breaks Additional tax relief of Rs 20,000 for investing in infrastructure bonds over and above the total investible limit of Rs 1 lac pa Allocation towards development of urban infrastructure stands at Rs 35 bn  Budget Impact Increase in refinancing from IIFCL will encourage banks to lend to infrastructure companies boosting overall growth in the sector Increased allocation towards road infrastructure development will better the existing transportation mechanism Extension of interest rate subsidy will boost the demand for affordable housing Providing additional tax relief for investment in infrastructure bonds will further encourage retail participation in the sector  Company Impact Extension of interest rate subsidy to benefit companies like Parsvnath and HDIL as they cater to low income housing group IRB Infra and IVRCL Infra to be directly benefitted as a result of increasing thrust on road infrastructure development Budget Impact: Construction Sector Analysis for 2009  | Construction Sector Analysis for 2011 Latest: Performance Of Construction Stocks | Construction Sector Report  Views on News IVRCL: A forgetful quarter (May 16, 2012) IVRCL: Plunging into all sorts of construction activity (May 2, 2012) (Cool Hand Luke) HCC: A forgetful year (Apr 28, 2012) IVRCL: Healthy order pipeline (Mar 1, 2012) DLF: Tough times continue (Feb 28, 2012) More Views on News Your feedback is important to us. Please Write to us.

Sector Performance COMPANY PRICE (Rs) ANSAL HOUSING 42.7 (-0.9%) ANSAL PROPERTIES 29.5 (3.2%) ATLANTA LTD 61.5 (0.1%) BL KASHYAP & SONS 8.9 (0.6%) DLF LTD 188.5 (1.9%) DS KULKARNI 58.9 (1.6%) ERA INFRA ENGG. 139.1 (0.5%) GAMMON INDIA 39.2 (-0.5%) GMR INFRA 20.5 (1.5%) GODREJ PROPERTIES 569.7 (-1.3%) HIND. CONSTRUCTION 18.4 (0.0%) HOUSING DEV. INFRA 62.9 (1.1%) HUBTOWN LTD 182.2 (1.0%) IL&FS ENGINEERING 55.8 (0.6%) IVRCL ASSETS & HOLDING 32.0 (0.6%) IVRCL LTD 42.6 (0.8%) JAIPRAKASH ASSO. 61.2 (2.4%) LOK HOUSING & CONS. 12.4 (-0.8%) MADHUCON PROJECTS 41.8 (-2.2%) MAHINDRA LIFESPACE 305.1 (-0.1%) NCC LTD 31.1 (0.0%) OMAXE LTD 145.0 (-0.1%) ORBIT CORP 37.2 (8.6%) PARSVNATH DEV 53.2 (-0.7%) PATEL ENGG. 85.1 (2.3%) PENINSULA LAND 28.8 (-1.2%) PHOENIX MILL 184.3 (0.4%) PRAJAY ENGG. 5.8 (3.9%) PRATIBHA INDS 37.8 (2.4%) PURAVANKARA 58.4 (1.1%) PVP VENTURES 4.0 (-1.5%) REL.INDUS.INFRAS 388.7 (-0.7%) SIMPLEX INFRA 215.6 (2.3%) SOBHA DEVELOPERS 290.4 (-1.7%) SUPREME INFRASTRUCTURE 271.6 (-1.0%) UNITECH 21.4 (-0.2%) UNITY INFRAPROJECTS 38.3 (2.4%) WELSPUN PROJECTS 29.6 (9.4%)