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Mukherjee raises FII limits for infrastructure investments news
28 February 2011

With the focus on attracting investments in the infrastructure sector, Finance Minister Pranab Mukherjee has raised the limit of funds to be invested by foreign investors in corporate bonds issued by companies involved in the infrastructure sector to $25 billion.

Mukherjee, while presenting  the Budget in the Lok Sabha, also said the government is planning to raise about $1 trillion during the 11th Five-Year plan, which starts from March 2012, to fund the infrastructure development programme.

''In order to give a boost to infrastructure development in railways, ports, housing and highways development I propose to allow tax free bond of Rs.30,000 crore to be used by various government undertaking in the year 2011-2012,'' the finance minister said.

These include the  Indian Railways Finance Corporation (IRFC) and National Highways Authority of India Limited (NHAI), which will issue tax-free bonds of Rs.10,000 crore each, and tax-free bonds worth Rs.5,000 crore each by HUDCO and the port sector. 

As part of a slew of measures to boost investment in the infrastructure sector, Mukherjee said the government will also extend income tax exemption on tax-saving infrastructure bonds up to a maximum of Rs.20,000 for one more year.

The Budget is widely expected to be a populist as the government  faces elections in five states in the midst of high prices and corruption scandals.

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Mukherjee raises FII limits for infrastructure investments