Finance minister P Chidambaram on Friday indicated that natural gas pipelines could be granted the status of infrastructure projects in his forthcoming Budget proposals for 2007-08. This implies that gas pipelines would be brought under the purview of Section 80 1A of the Income-Tax Act, allowing massive tax sops.

“Pipelines are just as important as roads and railways and should be accorded the same status. I assure that I will favourably consider providing infrastructure status to gas pipelines,” he said at a function to mark the doubling of capacity at Indian Oil Corporation’s Panipat refinery to 12 million tonnes.

Under Section 80 1A, notified infrastructure projects are allowed 100% deduction in profits for a period of 10 years commencing from the year of operations.The move will directly help companies that have announced gas discoveries and are planning to lay natural gas pipelines, including local and city gas distribution networks.