The union government has granted infrastructure status to the shipyard industry in a bid to ease its financial stress. With the infrastructure status, the shipyards will be able to avail flexible long-term funding at lower costs.
Can avail low cost funds“The Institutional Mechanism on Infrastructure chaired by Secretary, Department of Economic Affairs has recommended inclusion of shipyards undertaking shipbuilding and ship-repair under the Harmonised list of Infrastructure Sectors. With this inclusion, the financial stress which the stand alone shipyards are experiencing will be eased substantially,” according to an official statement issued by the Ministry of Shipping. The shipyards will be able to avail flexible structuring of long-term project loans, long-term funding from infrastructure funds at lower rates of interest and longer tenure equivalent to the economic life of their assets, relaxed ECB norms, issuance of infrastructure bonds for meeting working capital requirements as well as benefits under Income Tax Act, 1961, according to the statement.
JobsThe Indian shipyards employ around 30,000 people at present which will substantially go up once this sector is reviatlised, it added.
The shipbuilding industry is a strategically important industry due to its role in energy security, national defence and for developing heavy engineering industry.
