Share |

BACK TO BUDGET HOMEPAGE

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
  • 4 Penny Stock Mistakes I Will Not Make in 2020 (Dec 13, 2019) (Exponential Profits Special Report)
  • How Modi's Affordable Housing Focus is a Real Game Changer for the Economy (Jul 10, 2019) (Views On News)
  • Some Result Updates of Smart Money Secrets Stocks (Mar 6, 2019) (Quarterly Results Update)
  • Ashiana Housing Limited: Supply Reducing, Bookings on Track, Profits Delayed (Nov 27, 2018) (Smart Money Secrets Special Report)
  • PSP Projects: The Recent Market Correction is a Blessing in Disguise for This Stock (Sep 25, 2018) (The Phase One Digest)
    More Views on News

  • Your feedback is important to us. Please Write to us.
  •  

    Sector Performance
    COMPANY PRICE (Rs)
    ANSAL HOUSING 3.1
    (0.3%)
    ANSAL PROPERTIES 5.1
    (-3.0%)
    ASHIANA HOUSING 48.5
    (9.1%)
    ATLANTA LTD 6.5
    (1.6%)
    BL KASHYAP & SONS 4.0
    (-1.0%)
    BRIGADE ENTERPRISES 103.8
    (3.5%)
    DLF 152.4
    (1.0%)
    DS KULKARNI 13.6
    (-4.9%)
    GAMMON INDIA 1.5
    (-1.4%)
    GODREJ PROPERTIES 715.5
    (3.9%)
    HCC 4.6
    (5.0%)
    HDIL 1.6
    (1.9%)
    HUBTOWN LTD 9.3
    (-3.1%)
    IL&FS ENGINEERING 2.1
    (-4.9%)
    INDIABULLS REAL EST 43.8
    (2.9%)
    IVRCL 0.4
    (2.6%)
    JAIPRAKASH ASSO. 1.4
    (-1.4%)
    KOLTE PATIL 154.6
    (0.2%)
    MADHUCON PROJECTS 1.8
    (4.7%)
    MAHINDRA LIFESPACE 182.1
    (1.2%)
    NBCC (INDIA) LTD 18.2
    (4.9%)
    NCC 25.6
    (11.3%)
    OBEROI REALTY 334.9
    (4.8%)
    OMAXE LTD 182.1
    (2.4%)
    PARSVNATH DEV 1.9
    (4.9%)
    PATEL ENGG. 12.1
    (4.6%)
    PENINSULA LAND 3.0
    (-0.3%)
    PHOENIX MILL 568.8
    (6.8%)
    PRAJAY ENGG. 5.6
    (0.2%)
    PRATIBHA INDS 0.7
    (-2.7%)
    PRESTIGE ESTATES 153.5
    (-2.3%)
    PURAVANKARA 38.8
    (1.8%)
    PVP VENTURES 1.6
    (-4.9%)
    REL.INDUS.INFRAS 273.7
    (1.1%)
    SIMPLEX INFRA 29.9
    (4.9%)
    SOBHA LIMITED 199.4
    (1.7%)
    SUPREME INFRA. 6.4
    (0.2%)
    UNITECH 1.3
    (4.8%)
    UNITY INFRAPROJECTS 0.3
    (3.7%)
    WELSPUN ENTERPRISES 59.8
    (4.5%)
    ZANDU REALTY 1,896.0
    (2.6%)