Ship Building Stocks in Focus as govt proposes to set up Maritime Development Fund worth Rs 25K crore

With long-term financing for the maritime industry, the Union Finance Minister Smt. Nirmala Sitharaman has proposed to set up a Maritime Development Fund with a corpus of Rs 25,000 crore. This may give a certain focus shift to several Shipping Stocks. This corpus will be for distributed support and promoting competition in the maritime industry.

The fund will have up to 49% contribution by the Government, and the balance will be mobilized from ports and the private sector. The Finance Minister stated that the Shipbuilding Financial Assistance Policy will be revamped to address cost disadvantages, which will also include Credit Notes for shipbreaking in Indian yards to promote the circular economy.

Further, the large ships above a specified size are also proposed to be included in the infrastructure harmonized master list (HML). The Union Budget also proposes to facilitate ‘Shipbuilding Clusters’ in order to increase the range, categories and capacity of ships. This will include additional infrastructure facilities, skilling and technology to develop the entire ecosystem.

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Acknowledging that the shipbuilding has a long gestation period, the Finance Minister proposed to continue the exemption of Basic Customs Duty on raw materials, components, consumables, or parts for the manufacture of ships for another ten years. She further proposed the same dispensation for shipbreaking to make it more competitive.

Giving infrastructure fillip to the state of Bihar, the Union Finance Minister proposed that the Greenfield airports will be facilitated in Bihar to meet the future needs of the State. These will be in addition to the expansion of the capacity of Patna airport and a brownfield airport at Bihta.

Financial support will also be provided for the Western Koshi Canal ERM Project benefitting a large number of farmers cultivating over 50,000 hectares of land in the Mithilanchal region of Bihar.

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