The telecom tower industry has been granted infrastructure status by the Government of India, say news reports.
The government?s move is aimed at boosting investment in the tower industry. According to Kapil Sibal, Minister for Communications and IT, the infrastructure status for tower players will make them eligible for viability gap funding, a higher limit on external commercial borrowing, lower import duties and exemptions on excise duty on telecom infrastructure equipment.
With the grant of infrastructure status, the telecom tower companies will also benefit from more lenient lending rates as they will be eligible for long term loans for 10-15 years at 3-4 per cent interest, as against market borrowing rates of 12-13 per cent over a period of five to seven years.
The government will also offer these players a tax holiday under section 80-IA of the Income Tax Act. To identify the benefits under the proposed tax holiday, the government will soon initiate discussions with the Reserve Bank of India.
