Infrastructure
By ECONOMIC SURVEY 1999-2000 | 10 Apr 2007
1.29 The telecommunications sector continued its fast growth. New telephone connections provided (Direct Exchange Lines) increased by 33.4 per cent in April-December 1999 compared to 26.1 per cent in April-December 1998 (Table 1.6). This was faster than the growth rate of 27.1 per cent in 1997-98. Revenue earning goods traffic on railways showed a sharp upturn of 8 per cent in April-December, 1999 after having fallen by 2 per cent in 1998-99. Cargo handled at major ports showed a similar turn around with a growth of 9.2 per cent in April-December, 1999, compared to zero growth in 1998-99.
1.30 Reforms relating to the infrastructure sector included the following :
- A uniform tax holiday of 15 years for all infrastructure projects u/s 80 IA.
- Extension of the infrastructure sector tax-holiday to power transmission.
- Flexibility for companies to avail two tier fiscal benefits (i.e. 5 years for 100 per cent tax holiday and 30 per cent deduction from profits for another 5 years) for infrastructure consecutively in 10 out of 15 years. Companies formed after April 1, 1999 (e.g. from State Electricity Boards) for distribution of power also allowed the same incentives.
- Restructuring of airports of the Airport Authority of India (AAI) through long term leasing route.
1.31 A Foreign Investment Implementation Authority (FIIA) has been set up for providing a single point interface between foreign investors and the government machinery, including State authorities. It will be empowered to give comprehensive approvals. A project-monitoring unit has also been set up for facilitating implementation of projects having foreign equity of Rs.100 crore and above.
1.32 In order to effect separation of service providing functions from policy and licensing functions a separate Department of Telecom Services (DTS) has been set up in October, 1999. Department of Telecommunications (DoT) would be concerned with functions relating to implementation of treaties, policy matters etc. while DTS will look after the execution of work including purchase and acquisition of land, all matters other than policy and licensing relating to services of telephones, wireless, data, etc. A new telecom policy (NTP 1999) was announced. This allows multiple fixed service operators and opens domestic long distance services to private operators. DTS is to be corporatised by 2001. DTS/MTNL will be allowed to enter as third cellular operator in each service area, while existing license holders of basic and cellular services are allowed to switch over to revenue sharing arrangements. An Ordinance was issued in January 2000 to modify the TRAI Act so as to strengthen its power and to make a clear distinction between the recommendatory/advisory functions of the Authority. It will be mandatory for Government to seek the TRAI''s advice on policy and licensing issues. A separate appellate tribunal will be set up to hear appeals against the decision of TRAI and the Government licensor. Further appeals will then lie only in the Supreme Court.
1.33 Other initiatives with respect to infrastructure included the following:
- Imposition of a cess of Re.1 per litre on HSD to generate funds, most of which will be used for road development.
- Launch of a National Integrated Highway Project. As part of this project the golden quadrilateral was merged with the East-West and North-South corridors.
- Concessions given for import of equipment for road construction.
- Announcement of Mega Power Project policy.
- Indian Railway Catering &Tourism Corporation (IRTC) Ltd. incorporated as a Government Company with the objective of upgrading and managing rail catering and hospitality.
- Operational guidelines issued to banks and financial institutions for sanction of term loans for technically feasible & financially viable infrastructure projects.
