Budget 2024: The power industry wants more easily accessible subsidies, reduced GST rates, and stable policies

Budget 2024: The power industry wants more easily accessible subsidies, reduced GST rates, and stable policies

Budget 2024: The power industry wants more easily accessible subsidies, reduced GST rates, and stable policies

The industry believes that because the government has continuously backed the renewable energy sector, which has resulted in a large increase in installation and production capacity, its attention should be directed towards green hydrogen.

The government's emphasis on green energy programs is expected to continue in the electricity, renewable energy, and new energy sectors when the interim Union Budget is unveiled on February 1.

The budget will be put to a vote in anticipation of the general elections scheduled for April or May of 2024.

A government nearing the end of its tenure may fund its spending for a little while before a complete budget is approved thanks to vote-on-account.

The complete Budget for FY2025 would be given upon the formation of the new administration, according to Union Finance Minister Nirmala Sitharaman, who has previously said that "no spectacular announcements" should be anticipated from the forthcoming Budget.

However, the green energy and power sectors anticipate that the government will maintain policy stability by emphasizing green hydrogen, reducing the rates and subsidies associated with the goods and services tax (GST), and facilitating better access to climate funding.

More money for green hydrogen

Derek M. Shah, senior vice president and head of L&T Energy (Green Manufacturing and Development), believes that because the government has been continuously promoting renewable energy, particularly solar and wind power, its attention need to shift to green hydrogen. Is. This caused their installation and production capacities to grow significantly.

"It is crucial for the sector's growth to implement green hydrogen-blending mandates for specific industries such as manufacturing, fertilizers, and refineries, and to lower the 18% GST rate for electrolyzer manufacturing," he said.

According to Shah, measures to support the smooth export of green hydrogen and its derivatives as well as the inclusion of the production of electrolyzers and green hydrogen in priority sector loans are crucial to boosting the availability of finance for such projects.

persistent emphasis on renewable energy

Chief Financial Officer of Wari Renewable Technologies Ltd. (WRTL), Dilip Panjwani, said that in light of India's goal of installing 500 GW of renewable energy, the government need to provide regulatory incentives for energy storage technologies in order to preserve continuous grid stability.

On September 6, 2023, the Union Cabinet gave its approval to the power ministry's proposal to grant a Rs 3,760 crore Viability Gap Fund (VGF) for the production of battery energy storage systems (BESS) with a 4,000 MWh capacity. had provided. MWh). However, it has not yet been put into practice.

The capacity of developers and equipment suppliers to compete in accordance with international standards would be strengthened by low interest rates for the renewable energy industry combined with creative financing methods, according to Gyanesh Choudhary, Chairman as well as Managing Director of Vikram Solar Limited.

"The government must simplifies the process of obtaining subsidies as well as approvals for rooftop solar energy for the commercial as well as industrial (C&I) segment, simplify land acquisition as well as make the tariffs attractive to investors," said Choudhary. have to be taken into account as well."

The Approved List of Models and Manufacturers (ALMM) should be reinstated right away, according to Rajeev Kashyap, VP and MD of Nexttracker India, in order to stimulate competition and innovation in the solar sector.

In order to foster trust among stakeholders and provide a solid foundation for the renewable energy industry, the government should continue concentrating on stable and long-term policies, according to Amit Jain, CEO and Country Manager, ENGIE India.

Fund for Transmission with Discoms's Financial Well-Being

The vitality of the nation's distribution businesses (discoms) ultimately determines the state of the power industry, according to Prateek Agarwal, MD of Sterlite Power, rather than the amount of energy that the network produces or transfers.

"The budget should make sure that states are incentivized to bring about change the distribution sector because most of the financial benefits may be linked to reforms in this sector," Agarwal said.

Chaudhary said that for the effective integration of renewable energy, grid infrastructure upgrade is also required.

Concessional corporation tax extension Jimit Dewani, partner in tax at Deloitte India, said that the government had to, at minimum, prolong section 115BB's 15 percent concessional corporation tax rate, which runs out on March 31, 2024. The entire funding strategy for new renewable energy projects has to be made clear.

A provision known as Section 115BAB of the Income Tax Act, 1961, offers new domestic enterprises that manufacture or produce items in India a concessional tax rate of fifteen percent. In the 2019 Budget, this clause was included to encourage the manufacturing industry and draw in fresh funding.