Infrastructure Sector and Tax Related Issues in India

Abstract

Infrastructure is regarded as the backbone of economic growth of a country. The term 'infrastructure' has been defined to include electricity, telecommunications, the transport sectors (roads and bridges, railways, ports, and airports), irrigation, water supply and sanitation, storage and distribution of gas. It has been given due importance in 5-year Plans and the government is making committed efforts to make the best of it. Investment in infrastructure will improve the quality of life and reduce disparities across regions and communities. There has been a gradual shift from a controlled to market led economy where private players, including foreign investors, have a major role to play. The Government recognizes the need to develop India's infrastructure sector in order to sustain long term economic growth. Moreover, the significant initiatives and reforms introduced by the Government of India in recent years demonstrate its intention to accord priority towards the development of infrastructure in India. This paper provides an assessment of the investment requirements in the infrastructure sector development and tax benefit provided for investment in this sector.