Inland waterways, coastal shipping to get support

The development of the first two will vitalise ship-building and repair activities too, by creating demand for more vessels.

According to shipping ministry sources, coastal shipping will be accorded infrastructure status and a Coastal Shipping Development Authority will be set up to provide soft loans.

Income tax incentives will be given to multi-modal operators successful in diverting traffic to coastal shipping. Other sops include duty waiver on bunkers and spare parts of the vessels involved in coastal shipping.

A separate fund, only for inland waterway transport (IWT) projects, would also be put in place, the sources said.

The ministry has proposed a 10-year tax holiday for the ship-building and repair sector for improving the viability of ship yards.

Guidelines will be issued to standardise vessel designs to obviate the need for spending resources on designing "" each time a new order is placed.

This will also help in increasing the profitability of the sector by reducing repair time and cutting the cost of inventories. Fiscal incentives may also be provided to vessels using standard designs.

Two international shipyards -- at a cost of Rs 6,000 crore, to be financed through foreign direct investment or private participation -- have been planned.

The ministry has also proposed an outlay of Rs 4,000 crore to upgrade the existing shipyards.

The ministry will also seek a budgetary support of Rs 2,000 crore for the modernisation of PSU shipyards, while the private yards will have to raise Rs 1,200 crore.

The government plans to commit 59 per cent of the Rs 15,000 crore earmarked for the IWT sector, with the Centre and states sharing Rs 9,500 crore between them.

In addition, Rs 1,500 crore would be borrowed from external agencies and the rest would be raised from the private sector.

Of the Rs 10,000 crore to be directed towards coastal shipping, Rs 5,600 crore would be borrowed from financial institutions. Dedicated terminals, at a cost Rs 2,400 crore, would be constructed at all major ports for the exclusive use of coastal vessels.

Expenditure to the tune of Rs 5,700 crore would be undertaken for the construction of six new National Waterways and infrastructure development of the existing three National Waterways.