Budget 2019 Kindles Hope for India’s Renewable Industry and E-Mobility Segment
The budget presented by the Hon’ble Finance Minister of India, Smt. Nirmala Sitharaman on July 5, 2019, shows a marked increase in the budgetary allocations for renewable energy sources. The budget has an outlay of
9.20 billion for wind power,30.05 billion for solar (both grid-connected and off-grid), and 5 billion for green energy corridor that aims at synchronizing electricity produced from renewable sources with conventional power stations in the grid. A budgetary outlay of
40.66 billion has been fixed for the power supply program of Deendayal Upadhyay Gram Jyoti Yojana (DDUGJY), and10.35 billion for the power system development fund. In her speech, the Finance Minister Smt. Nirmala Sitharaman said, “We will use the approach of mission LED bulb to promote the use of solar stoves and battery chargers in the country.”
The budget also underlines the relief that will be provided to solar manufacturers in India. The minister stated that to boost economic growth and the Make in India programme, the government will launch a programme to invite global companies through a transparent competitive bidding process to set up mega-manufacturing plants in advanced technology areas such as semi-conductor fabrication (FAB), solar photovoltaic cells, lithium storage batteries, solar electric charging infrastructure, computer servers, and laptops. In a significantly positive development for the mobility segment, the budget puts the impetus on electric vehicle (EV) adoption in India. To make EVs affordable to consumers, the government will provide additional income tax deduction of
150,000 on the interest paid on loans taken to purchase EVs. This amounts to a benefit of around 250,000 over the loan period to the taxpayers who take loans to purchase EVs. Moreover, in order to promote e-mobility, customs duty on certain parts of electric vehicles will also be exempted.
Moreover, the government has announced that it will support private entrepreneurship in driving valueaddition to farmers’ produce from the field and for those from allied activities, like bamboo and timber from the hedges and for generating renewable energy. Smt. Sitharaman stated that the government is examining the performance of the UDAY programme and it will be further improved. The centre will work with the state governments to remove barriers like cross subsidy surcharges, undesirable duties on open access sales or captive generation for industrial and other bulk power consumers. Besides these structural reforms, considerable reforms are also needed in tariff policy. A package of power sector tariff and structural reforms will soon be announced, according to Sitharaman. On the topic of rural development, Sitharaman announced that all willing households in the country will have electricity by 2022 along with clean energy fuel. The budget demonstrates the government’s commitment to boost programmes that have been announced for the growth of solar, wind, EV, and energy infrastructure sectors. A budgetary allocation of `123.5 billion has been made for the Ministry of New and Renewable Energy (MNRE). Budgetary allocation for green energy corridor, off-grid solar, FAME, power system development fund shows that the government is working on all problem areas.