The power ministry made its recomendations for the budget yesterday. Most of them are towards rationalization of taxes and duties to bring down the costs of power producing companies.

These include:

Exemption for power companies from section 195A. 195A results in an inflated rate of tax and increases the per unit cost of power. The ministry argues that this exemption would result in cheaper power for the state electricity boards. According to the ministry's calculation, this exemption would result in a tax savings to the tune of Rs 436 crore in FY07 for NTPC.

The power ministry also wishes for a reduction in the excise duty from the current 16% down to 8%. It says that unlike other sectors, the power sector cannot enjoy the benefit of MODVAT or CENVAT without these cuts. A reduction in excise duties was also recommended by the N.K Singh Committee.

Worried about the demand-supply gap for LNG, the ministry wants a waiver of customs duty on both LNG and natural gas from the current 5%. If this duty is waived, NTPC would save about Rs 215 crore per year. It has also asked for a complete waiver of customs duty on imported naptha for power generation and has prescribed an 8% excise duty for the same.

The power ministry has also recommended different sets of duties for mega and non mega power projects. Mega power projects were to enjoy an initial concessional zero customs duty, but now the ministry wants a customs duty of 5% and a countervailing duty of 8% for non- mega power projects.

How many of the Power ministsry's proposals was implemented in the budget .