The power ministry wants finance ministery to extend the tax holiday on power projects in the Budget to Parliament on 26 February.
The tax break on 31 March, 2011, making any power project that starts operating after that ineligible for the benefit. The law allows a developer to claim tax exemption of up to 10 years within the first 15 years of a project's commissioning.
India has a power has power generation capacity of 153000MW and plans to add 78577MW by 2012, requiring some IRs10.31 trillion. According to the power ministry, the government expects to face a IRs4.51 trillion funding shortfall. Of the 11th Plan capacity targets, the government expects only around 62000MW to be commissioned
Thermal power projects require an investment of around IRs50M per MW. For hydroelectric projects, the investment per MW is higher.
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