The Reserve Bank of India (RBI) has allowed banks and financial institutions (FIs) to exceed the cap of 50 per cent group exposure by 10 percentage points for all infrastructure projects. Till now, this relaxation was for projects in power, roads, telecommunications and ports.
In the Income Tax Act, 1961, infrastructure includes power, roads, highways, bridges, ports, airports, rail system, water supply, irrigation, sanitation and sewerage system, telecommunication, housing and industrial parks. Analysts find the RBI announcement before the budget significant because there has been demand from various trade and industry bodies to treat steel and cement, for instance, as core sectors for funding purposes.
