Govt grants infrastructure status to Shipyard industry
The government has granted infrastructure status to the shipyard industry, a move that will help the sectoral players get long-term financing at cheaper rates. A Gazette notification issued by Department of Economic Affairs in the Ministry of Finance last month issued an "updated Harmonized Master List of Infrastructure." "The new list incorporates the following change to the notification dated October 13, 2014: Under the Category of 'Transport' a new sub-sector - Shipyards is added," the notification said. The move will benefit private shipyards of L&T, Reliance Defence and Engineering Shipyard and ABG Shipyard. The transport sector now has seven sub-sectors - roads and bridges, ports, shipyards, inland waterways, airport, railway tracksand urban public transport. The infrastructure status would help shipyards avail cheaper financing. At present, companies pay average interest of 14-15 per cent on their borrowings. The status is also expected to give a boost to government's 'Make in India' initiative as cheaper finance will help Indian shipbuilders overcome, to a large extent, cost disadvantage on building ships.