India’s infrastructure sector is going through a significant transformation. Investment in infrastructure is envisaged to double from US$500 billion in 2012-13 to US$1 trillion in 2017-18, with about half of this to be achieved through private sector investment.
Reasons to invest include: (i) expected economic growth of 7-7.5% despite the global downturn; (ii) few restrictions on foreign direct investment (FDI) for infrastructure projects; (iii) a 10-year tax holiday available to enterprises engaged in the development, operation and maintenance of infrastructure facilities, subject to compliance with the prescribed conditions; (iv) opening up of the infrastructure sector through public-private partnerships (PPPs).
Growth areas
Nearly all of the infrastructure sectors present excellent opportunities, with staggering sums of investment planned for roads and highways, ports and airports, railways and power. Most of the infrastructure projects in India are run through PPP mode in one of its forms such as BOT (Built Operate Transfer), BOLT (Build Operate Lease Transfer), etc. PPPs are gaining in importance, and are benefiting from government support. Many multinational companies already have equity participation in PPPs, with companies based in Malaysia, the UK and Mauritius being the significant ones.
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