September 27, 2007
Study calls for renewal of Indian shipbuilding subsidy
A study by KPMG India Pvt. Ltd recommends a 10-year extension of Indian shipbuilding's 30% subsidy scheme and says shipbuilding should be treated as an infrastructure activity, making it eligible for various tax incentives.
The study was commissioned by the Shipyard Association of India at the request of finance minister P. Chidambaram. The finance ministry's approval is necessary to restart the subsidy scheme, which ended on August 14.
Indian business website Livemint.com quotes Vijay Kumar, managing director of Bharati Shipyard Ltd. as saying that the study, which has been submitted to the Union shipping ministry, recommends continuation of the subsidy until 2017 and then that the subsidy be scaled down to 25% for another five years, through 2022.
The KPMG report was discussed by the shipping ministry and representatives of shipbuilders in New Delhi on Tuesday, says Livemint.
The ministry is expected to move a cabinet note to extend the subsidy scheme.