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30
India-EU: Creating Market Alliances
Incentive Structure
Incentive Structure: Government incentivizing private participations through various programs
and exemptions
Incentives Offered to
Waste Management
Companies:
Fiscal
‣ 10 Year Tax Holiday
‣ 100% FDI Waiver
Government
Initiatives
‣ Setting up Energy
Fund
‣ Institutionalising
sector specific
JNNURM Program
~42% of the respondents
expect the government to
offer no special incentives
for EU companies, only a
level playing field
In order to encourage private participation in waste
management sector the government offers an array of
incentives. The overall budget of government agencies operating
in waste management sector has increased, which enables them
to transfer the benefits to the private operators.
Major incentives that have been introduced in wastewater
management space have been highlighted as follows:
Fiscal Incentives:
1. Tax Holiday: A 10 year, 100% deduction of profits and gains is
available for companies operating in water supply projects,
water treatment systems, and sanitation and sewage projects.
2. FDI Opportunity: 100% FDI is permissible under automatic
route in construction and maintenance of Rural Drinking Water
Supply Projects, Package Water Treatment Plants, Rain and
Rain Water Harvesting Structures, Waste-Water Recycling.
3. Loans Availability: Soft loans are provided through:
IREDA, a public sector company of the Ministry
Nationalised banks and other financial institutions for
identified technologies / systems
4. Tax / Duties Relief:
Direct taxes: 100% depreciation within 1 st
installation
year of project
Exemption / reduction in excise duty
Do EU Wastewater companies expect
government to offer special incentives?
Is raising capital in India percieved to be
challenging for EU Wastewater SMEs ?
Can't say
10, 20%
50
Yes
19, 38%
Can't say
22, 44%
50
Yes
5, 10%
Not
Required
21, 42%
No
23, 46%
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