After a review of the infrastructure sector by the Prime Minister Dr. Manmohan Singh, 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. The target also include, obtaining approval of establishing two new Major Ports – one in Andhra Pradesh and another in West Bengal. This was stated by Shri G.K. Vasan, Union Minister of Shipping while inaugurating the National Conclave on Shipping organized by the Federation of Indian Export Organizations in Chennai today.
The Minister has further stated that in this year’s Union Budget, the tax-free bond scheme has been extended for one more year to enable the 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 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 Union Budget would certainly provide an impetus for the growth of the port sector in our 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.
Shri Vasan said that after the introduction of the tonnage tax regime, Indian shipping which was stagnating around 6 million Gross Tonnage for a decade witnessed a steady growth to reach 11 million Gross Tonnage by the end of 2011. The capacity of Indian ports went up to more that 1200 million metric tonnes by 31.03.2012 from about 1100 million metric tonnes per annum at the end of the previous financial year.
India’s external trade, as a proportion of GDP has more than doubled in the last 10 years and is close to 40%. 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 the container volumes in India are expected to witness high growth in the years to come.
The Minister informed that the Ministry of Shipping has also taken up with the Ministry of Finance the need for exemption of Minimum Alternate Tax (MAT) on the book profit on sale of qualifying ships and its inclusion within tonnage tax regime. The inclusion of interest income on funds deployed out of tonnage tax reserve within tonnage tax regime is also among the various other issues that are being taken up with the Ministry of Finance.