Corporate tax reduced to 30% from the present level of 35%, with an increase in surcharge to 10%.
Industry not granted "Infrastructure" status, as demanded by players.
Significant thrust on Infrastructure building and road development. An outlay for National Highway development increased from Rs 65 bn in 2004-05 to Rs 93 bn in 2005-06. Government proposed to establish an SPV to finance infrastructure projects in specified sectors like roads, ports, airports and tourism, which could draw upon the country's foreign exchange resources for financing necessary imports. The cumulative borrowing limit for 2005-06 was set at Rs100bn.
The National Urban Renewal Mission was designed to upgrade urban infrastructure. It covered seven mega cities, with a population of over a million, and some other towns. An outlay of Rs 55bn has been made in 2005-06, including a grant component of Rs 16.5bn for the Mission. Projects such as The Mumbai Metro Rail Project, the Mumbai Trans Harbour Link, the Mumbai Western Expressway Sealink and the Bangalore Metro Rail Project to funded through this mission. Steps to be taken to make Mumbai a regional financial center
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Plan allocation has been increased from Rs 7.8 bn to Rs.8.3 bn for the tourism sector.
The FM had announced the development of 15 tourist destinations and circuits.
Also, 50 villages with core competency in handicrafts, handlooms and culture, close to existing destinations and circuits will be identified and developed.
Service tax rate increased from 10% to 12%.
Peak customs duty reduction
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Provision for building tourist infrastructure has been proposed to increase from Rs.4.2 bn in 2006-07 to Rs.5.2 bn in 2007-08.
20,000 more hotel rooms are required for the Commonwealth Games. To cater to the demand for rooms 5 year holiday from income tax for 2 star, 3 star and 4 star hotels as well as for convention centres with a seating capacity of not less than 3,000 has been proposed. They should be completed and begin operations in the National Capital Territory of Delhi or in the adjacent districts of Faridabad, Gurgaon, Ghaziabad or Gautam Budh Nagar during the period April 1, 2007 to March 31, 2010 to avail the tax holiday.
Venture capital funds that invest in hotel-cum-convention centres of a certain description and size will enjoy a pass through status.
Higher investments have been made to develop roads and infrastructure facilities.
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