Like most people in the renewables sector, I also followed the Union Budget presented by Mr. Jaitley, hoping that the Finance Minister(FM) will provide the answer to a nagging question – “How will the revised target of 100 GW for solar, 60 GW for wind and 15 GW for other renewables be achieved?” Coming just a few days after the first RE-Invest event, the budget was naturally expected to answer this question. The MNRE officials worked extremely hard to make RE-Invest a success, having crisscrossed the world to conduct roadshows in cities like London, Singapore, Hamburg and Davos, even at the risk of stopping the entire JNNSM(there has not been any allocation of MW scale solar projects under JNNSM for almost a year, since March 2014).
So, what do we get from the budget?
a. The FM mentioned the revised renewable energy target of 175 GW by 2022. Well, we have already heard it umpteen number of times by now.
b. The FM increased the clean energy cess from Rs.100 to Rs. 200 per metric tonne on coal. And the key point here is ” to finance clean environment initiatives”, which means that the funds could be used for, say, cleaning of river Ganga and “Swacch Bharat” initiatives. I am sure that everyone will welcome a clean environment, but the question is, how much money from the “clean energy cess” will be used towards funding “clean energy projects”? Past record suggests that it will only be a small percentage. This topic about clean energy cess was analysed after last year’s budget as well, and the situation has not changed much since then(read here). National Clean Energy Fund(NCEF), where the clean energy cess goes, has accumulated to Rs. 40,000 Crores, but the disbursal has been quite slow(read more here).
c. Excise and customs duties on certain items(solar water heaters, vacuated tubes for solar water heaters, AEC for inverters, raw materials used for PV ribbons manufacture) have been reduced/restructured. These are welcome measures, but do not make any major difference to the aggressive capacity addition goals.
d. Initial outlay of Rs. 75 Crores towards a newly launched scheme with a nice sounding acronym FAME(Faster Adoption and Manufacturing of Electric Vehicles). The outlay might be used for some feasibility studies or preparing some vision document. (Remember the Rs. 7060 Crores outlay for 100 smart cities in the previous budget? There was no mention of smart cities this time).
Bottomline? There are no answers yet about the “175 GW” capacity implementation and till the time the answers are articulated, the intentions and “non-binding” commitments made at the RE-INVEST by several companies towards investing in renewable energy in India will remain just that – “non-binding”.
5 thoughts on “Union Budget 2015 – Still waiting for answers”
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Excellent summary and commentary, Madhavan.
– satyen
Thank you Dr. Satyen!!
yep.a very disappointing budget for renewables. and particularly solar which is being held ransom on account of regulatory/policy initiatives. It sure will bring about a cautious approach from the many international visitors who are preparing extensively in contributing their leanings, and finances to build a greener India….. lets hope, with a view to not reflect undue favoritism, that promised framework and roadmap are separately issued this march…
Please publish the Interviews of Corporate Honchos who made such mindless “Non Binding” commitment to the Nation. Does it pass NATION FIRST Dharma with such JUMLAs?
Corporate and the Government (political set up) start toeing the same line = Death of Industry and No jobs, but, only Subsidy Sucking by few.
What is the reply from the MNRE officials, who also played a gung ho at RE-INVEST, which was attended by many, who now are realising the JUMLA contest.
Priorities do change, but, saying something and doing something, is a loss of faith. There are many good thinkers, who can think INDIA FIRST and the Funding, Interest rates, Channelizing Black Money through amnesty with Many JUMLAs to come in, No transparency, No good governance in Many States including at center, Only look for 2016 Majority in Rajya sabha has made this situation (or an excuse), as the two large corporate companies in Gujarat must start producing (to have assured orders for CRONY CAPITALISTS!!), so wait friends till the JUMLA gets settled.
Have patience or become a Patient in a Hospital is the next JUMLA??… Entrepreneurship will die down till then, so, CRONY CAPITALISM will find its way, so keep waiting to see the dance of mis-conceived democracy till then.
I read with sympathy of Mr.Prveen Kumar Kulkanri, and could understand his anger and anxiety, while agreeing few points with him about the national drama being staged with political objectives. But not to surprise with that, as India been in similar situation and seen many political motivated dramas for last 6+ decades, from India’s independence. But we also should accept that, with all that melodramas and politicking, India has grown multi folds in last 60+ years, where we are now. That cannot be denied. India is a great country with vast resources and many forbearance capabilities. I am positive in thinking, that with all the odds, the solar and the RE industry will thrive in here and more people in all walks of life would be involved beneficially. let us wait and see.