The Finance Ministry has granted ‘Infrastructure’ status for exhibition and convention centres, a move that is expected to ease bank financing for such projects.
‘Exhibition-cum-Convention Centre is included in the Harmonised Master List of Infrastructure sub-sectors by insertion of a new item in the category of Social and Commercial Infrastructure,’ the Department of Economic Affairs said in a notification.
However, the benefits available as ‘infrastructure’ projects would only be available for projects with a minimum built-up floor area of 1,00,000 square metres of exclusive exhibition space or convention space or both combined. This includes primary facilities such as exhibition centres, convention halls, auditoriums, plenary halls, business centres, meeting halls etc.
As of now, the major projects under way in the sector are backed by the government – the International Exhibition-cum-Convention Centres at Dwarka as well as Pragati Maidan in the capital.
The infrastructure tag no longer involves significant tax breaks but would help such projects get easier financing from banks, said experts. However, restrictions on size may be a dampener for some ventures.
“India doesn’t have large convention centres or single halls with capacities to hold 7,000 to 10,000 people, unlike countries like Thailand that is a major global MICE destination,” said Abhaya Agarwal, partner, infrastructure practice at EY India.
Becoming a MICE (Meetings, Incentives, Conferences and Exhibitions) destination can generate significant revenue with several global companies active in India but it will take time to become a preferred destination.
“This move will enable more such projects to come up across India’s tourist destinations, though it may make sense to review the prescribed floor area so we can have convention centres of different sizes for varying needs,” Mr. Agarwal said.
Last August, the government had added affordable rental housing projects to the list of sectors recognised as infrastructure.