For the last 50 years, India has been able to make barely half of the desired level of investment in the power transmission and distribution (T&D) sector. Transmission lines in India are loaded up to 90% against the world standard of 60-65%.

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While issues relating to the financial health of state electricity boards have been addressed in some way by means of a bailout package, its impact is not likely to be seen in the short term. The Budget needs to emphasise on accelerating investments in the T&D sector.

In line with other infrastructure sectors such as roads, airports, ports, railways, transport terminals etc, the government should consider extending service-tax exemption to all power projects, including generation and T&D projects. This would reduce the cost of generation and distribution, as power generation and distribution companies are not entitled to credits on tax paid on procurements.

Another measure that would benefit T&D is the creation of a corresponding provision in the CST Act to grant exemption to sub-contractors/sub-vendors supplying goods to SEZ unit/developer/co-developer. As per Section 8(8) Central Sales Tax Act 1956, there is exemption of CST for supply of manufactured goods to SEZs against form ‘I’. Section 26 of SEZ Act read with Rule 10 of SEZ Rules, allows exemption of CST to sub-contractors only.

Last but not least, we need to strategically plan the domestic availability of Cold Rolled Grain Oriented (CRGO) steel. CRGO electrical steel, a critical raw material for manufacturing transformers, is fully imported as it is not manufactured in India.

Although the Special Additional Duty has been removed on CRGO, nil duty imports should be allowed till indigenous production is made available.

The writer is MD & CEO, KEC International  Views are personal