After a review of the infrastructure sector by the Prime Minister, Dr Manmohan Singh (India), a target has been set for the Shipping Ministry for award of projects for creating 244 million tonnes of capacity during 2012-13 spread across 42 projects at an estimated cost of Rs 14,500 crore, Exim News Service informs.
The target also includes obtaining approval for establishing two new Major Ports—one in Andhra Pradesh and another in West Bengal. This was stated by Mr G. K. Vasan, Union Minister of Shipping, while inaugurating the National Conclave on Shipping organised by the Federation of Indian Export Organisations (Fieo) in Chennai on Monday (June 18).
The Minister said that in this year’s Union Budget, the tax-free bond scheme has been extended for one more year to enable ports to raise funds to the tune of Rs 5,000 crore for various projects. The rate of withholding tax on interest payments on external commercial borrowings (ECB) has also been reduced from 20 per cent to five per cent for a period of three years for ports and shipyards. These two announcements and a few other incentives offered in the Budget would certainly provide an impetus for the growth of the port sector in the country, he added.
The Minister further informed that the comprehensive Land Policy of 2010, aimed at optimal use of land, was being revised further to bring in more transparency.
He said that after the introduction of the tonnage tax regime, Indian shipping, which was stagnating around 6 million gross tonnage for a decade, witnessed steady growth to reach 11 million gross tonnage by the end of 2011. Port capacity went up to more than 1,200 million tonnes by the end of 2011-12 from about 1,100 million tonnes per annum at the end of the previous fiscal.
India's external trade as a proportion of GDP has more than doubled in the last 10 years and is close to 40 per cent. Bulk of this international trade is carried through shipping. The Minister expressed the hope that in future, high demand for energy will result in increased import of coal and oil. Similarly, container volumes in India are expected to witness high growth in the years to come.
The Minister also intimated that the Ministry of Shipping has taken up with the Ministry of Finance the need for exemption from minimum alternate tax (MAT) on the book profit on sale of qualifying ships and its inclusion in the tonnage tax regime. The inclusion of interest income on funds deployed out of tonnage tax reserve in the tonnage tax regime is also among the various other issues that are being taken up with the Ministry of Finance, he pointed out.