Measures for construction contractors announced by FM
Real Estate

Measures for construction contractors announced by FM

Finance Minister Nirmala Sitharaman announced several measures yesterday, including those for construction contractors, the MSME sector,  the real estate sector, Discoms,  among others.

In this article, we take a look at the measures announced for contractors. For ongoing public works, the Finance Minister has granted a concessional period to be extended by three to six months for contractors. Government agencies will partially release bank guarantees for partially completed contracts.

Commenting on the move, says Vijay Agrawal, Executive Director, Equirus Capital, “The government has announced extension of six months period for all works contract being executed. This extension will also include milestone execution of projects. This will help the industry to complete projects without worrying about any liquidated damages or penalties. The Finance Minister has also announced that concession period for all PPP projects will also be extended by six months. This will help PPP project developers and investors for loss of revenue due to lockdown.”

The Finance Minister has also announced for release of partial bank guarantee submitted by contractors based on completion of work. “This will help contractors to manage their non fund limits with banks since they are struggling to manage non fund limits,” adds Agrawal.

Under RERA provisions as well, six months extension will be given for completion of projects. “This will help developers to complete their projects and obtain completion certificate without attracting any penal provisions,” says Agrawal.

Further, TDS rates have been reduced by 25 per cent. This will generate more than Rs 50,000 crore liquidity for the industry in general, believes Agrawal.

According to Sandeep Upadhyay, Managing Director-Infrastructure Advisory, Centrum Capital, “The extension of up to six months announced both for ongoing construction contracts and concessions awarded on PPP model is a welcome move, however, the contracting community is awaiting to hear on the outcome of force majeure provisions triggered during the COVID period on the government contracts. While the intent of the government demonstrated by augmenting scope of the grand NIP is both ambitious and commendable, it is the roll out plan that really matters.”

Commenting further on the Finance Minister's announcement for road contractors, adds Arindam Guha, Partner, Leader-Government and Public Sector, Deloitte India, “For road sector contractors and PPP concessionaires, a standstill period of six months has been announced with no associated penalties for not meeting project milestones, automatic extension of contract period, etc. This is another example of simplifying the investment climate with contractors or concessionaires not having to seek extension on a case by case basis.”

Finance Minister Nirmala Sitharaman announced several measures yesterday, including those for construction contractors, the MSME sector,  the real estate sector, Discoms,  among others. In this article, we take a look at the measures announced for contractors. For ongoing public works, the Finance Minister has granted a concessional period to be extended by three to six months for contractors. Government agencies will partially release bank guarantees for partially completed contracts. Commenting on the move, says Vijay Agrawal, Executive Director, Equirus Capital, “The government has announced extension of six months period for all works contract being executed. This extension will also include milestone execution of projects. This will help the industry to complete projects without worrying about any liquidated damages or penalties. The Finance Minister has also announced that concession period for all PPP projects will also be extended by six months. This will help PPP project developers and investors for loss of revenue due to lockdown.” The Finance Minister has also announced for release of partial bank guarantee submitted by contractors based on completion of work. “This will help contractors to manage their non fund limits with banks since they are struggling to manage non fund limits,” adds Agrawal. Under RERA provisions as well, six months extension will be given for completion of projects. “This will help developers to complete their projects and obtain completion certificate without attracting any penal provisions,” says Agrawal. Further, TDS rates have been reduced by 25 per cent. This will generate more than Rs 50,000 crore liquidity for the industry in general, believes Agrawal. According to Sandeep Upadhyay, Managing Director-Infrastructure Advisory, Centrum Capital, “The extension of up to six months announced both for ongoing construction contracts and concessions awarded on PPP model is a welcome move, however, the contracting community is awaiting to hear on the outcome of force majeure provisions triggered during the COVID period on the government contracts. While the intent of the government demonstrated by augmenting scope of the grand NIP is both ambitious and commendable, it is the roll out plan that really matters.” Commenting further on the Finance Minister's announcement for road contractors, adds Arindam Guha, Partner, Leader-Government and Public Sector, Deloitte India, “For road sector contractors and PPP concessionaires, a standstill period of six months has been announced with no associated penalties for not meeting project milestones, automatic extension of contract period, etc. This is another example of simplifying the investment climate with contractors or concessionaires not having to seek extension on a case by case basis.”

Next Story
Infrastructure Urban

Ramky Infra Wins Multiple Awards for Safety and Sustainability

Ramky Infrastructure (RIL), a leading company in Sustainable Infrastructure Development, has been honoured with two prestigious National and International Awards, reinforcing its commitment to high standards in Health, Safety, and Environmental practices.These recognitions, awarded by the British Safety Council (BSC) and the Confederation of Indian Industry (CII), underscore Ramky’s leadership in implementing Safety-First practices across all phases of Infrastructure Development.International Safety Award from the British Safety CouncilRIL was presented with the International Safety Awards 2..

Next Story
Infrastructure Urban

Hindustan Zinc Sees 44% Rise in LGBTQIA+ Workforce Representation

Hindustan Zinc, India’s only and the world’s largest integrated zinc producer, announced a 44 per cent year-on-year growth in LGBTQIA+ employees across operations. The company has also launched its Pride Month campaign titled #CallHZLYourHome reaffirming its commitment to fostering an inclusive, diverse, and safe workplace. The campaign highlights the company’s proactive strides toward gender and identity equity. The company has pioneered LGBTQIA+ inclusion with industry leading workplace policies such as providing financial support of up to Rs 1 lakh for transgender employees, Rs 2..

Next Story
Equipment

Liebherr Tower Cranes Aid Restoration of Parador de Santiago

Two Liebherr tower cranes are contributing to the careful restoration of the Parador de Santiago de Compostela, one of Galicia’s most iconic cultural landmarks. Located in a central urban setting with limited space and heavy public traffic, the site presents demanding logistical and technical challenges. The Flat-Top cranes, the 71 EC-B and 125 EC-B, are proving their worth with precise control, compact dimensions, and low noise emissions. The project forms part of a national restoration initiative aimed at preserving historic buildings across Spain.Guadalajara, Spain – 26 June 2025 – Tw..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?