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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% NRI, OECD, TOI, Business Standard, Equity Bulls www.ebtc.eu
Building Access for “Waste-Water Management” Companies 31 Exemption from Central Sales Tax, and customs duty concessions on the import of material, components and equipment used in “Renewable Energy” RE projects Duty-free import of renewable energy equipment Exemptions from electricity taxes 5. Subsidies: CETPs, TSDF, and conveyance pipelines for treated wastewater disposal into deep sea are eligible for a 25% state subsidy. Capital subsidies and concessionary financing from the Indian Renewable Energy Development Agency are available. Government Initiatives: Setting-up an Energy Fund: In the Union Budget 2010-11, the government announced the setting up of the NCEF for all funding research and innovative projects within clean technologies. Initiating Waste Management Programs: Government has set up JNNURM program to fund cities for developing urban infrastructure and services. In recent past, funds allocated for JNNURM increased by 87% for 2009-10 to € 2B, which is attracting global players to enter the Indian market. As of May 2009, government had sanctioned 463 projects requiring an investment of ~€ 7.5B, mainly for basic urban services like water supply, sewerage and storm-water drainage. Budget Expansion: Plan outlay for the Ministry of New and Renewable Energy has increased by 61%, from € 99M in 2009- 10 to € 160M in 2010-11 Encouraging Public-Private Partnerships: Through economic incentives, both the central and state governments are promoting PPPs for the development of infrastructure for environmental services Other Incentives Scrap / waste / remnants / unutilised materials / surplus or obsolete capital goods may be exported or sold in the DTA on payment of duties Liberalised foreign investment approval regime is enabled to facilitate foreign investment and transfer of technology through joint ventures www.ebtc.eu
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