What the Budget does

• The general CENVAT rate has been reduced to 14% from 16%.
• Allocation for National Highway Development Programme (NHDP) has been enhanced to Rs 12,966 crore in 2008-09 from Rs 10,867 crore bn in 2007-08.
• The budget has given special attention to development of roads in North Eastern region where 180 kms of roads will be completed in 2007-08 and 300 kms of road is being targetted for completion in 2008-09.
• The corpus of Rural Infrastructure Development Fund (RIDF-XIV) has been raised to Rs14,000 crore, with a separate window for rural roads.
• The budget has also given considerable thrust to irrigation project where the outlay for 2008-09 has been increased to Rs 20,000 crore from Rs 11,000 crore in 2007-08.
• The government is setting up 14 irrigation projects with initial capital of Rs 100 crore to fund long-gestation major and medium irrigation projects.

Also read: How Budget affects your stocks

Impact on sector

• The Bharat Nirman and water irrigation programmes will benefit companies involved in road construction and BOT irrigation projects.
• Reduction of CENVAT is also a big positive for the sector as it indicates government's commitment towards the Goods and Service Tax Act.

Impact on companies

• Companies like Jain Irrigation and Madhucon Projects [Get Quote] will benefit from increased outlay in irrigation spending.
• HCC and Gammon India [Get Quote] likely to benefit from the highway development projects.

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