Union Budget 2012-13: Government eases infrastructure funding options

NEW DELHI: Airline & Private Infrastructure companies engaged in aviation, railways, ports, power, roads are in for some heightened activities in the coming years as the government opens up funding options for such companies. External Commercial Borrowing norms for most projects in these sectors have been liberalised to ensure easy access to funds.

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Airline companies that are facing huge resource crunch can now tap external debt markets to borrow for working capital requirements. Cash-strapped airline companies will need to clean up books, and put in place revenue models to take advantage of the new funding source and should come as a boost to the airline companies. FDI by airline companies that may have been an option still remains a plan on paper.

Infrastructure, like every, other year has been, identified as the poster buy for reforms in Budget 2012-13. Finance Minister Pranab Mukherjee while highlighting that Rs 50 lakh crore would be spent in the infrastructure sector in the 12th plan period emphasised that 50% of this would come from the private sector.

Pointers:

*Cash Strapped airline companies need to clean up books to access ECB for working capital requirements--Impact Kingfisher, Spicejet, Air India, Indigo, Jet

*Coal mining companies who have sitting on projects without work now run the risk of losing licences- Private and government run mining companies Jindals,

*Power companies to get some targeted relief as inter ministerial group to look into fuel supply by Coal India Ltd. -Impact -Tata Power, Reliance Power, Jindal Power, Adanis, GMR, GVK

*LNG storage oil pipeline companies to get access to more easier funding with ECB norms relaxed. Irrigation projects now get special attention as infrastructure sector. Impact - Reliance Industries, Petronet , Shell, Gujarat Gas