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India budget set to bring clean energy revolution

Date
10 July 2014
India budget set to bring clean energy revolution

NEW DELHI: Keeping up with the Narendra Modi-led government’s aim to promote clean energy, Finance Minister, Arun Jaitley revealed a strategic way forward for harnessing India’s renewable energy sources, as he unveiled the country's budget today.

India's new government has announced the Union Budget 2014, pledging to kick-start the economy with more foreign investment, bigger spending on infrastructure and a renewed clean energy boost.

Minister Jaitley stated: “New and Renewable energy deserves a very high priority. It is proposed to take up Ultra Mega Solar Power Projects in Rajasthan, Gujarat, Tamil Nadu, and Ladakh in J&K [Jammu and Kashmir]. I have set aside a sum of 500 crores for this.”

Moving on to mention the need of the hour, he said: “We need to maximize our utilization of solar power. The existing duty structure incentivizes imports rather than domestic manufacture of solar photovoltaic cells and modules.”

India’s potential for electrifying villages with solar energy and increasing solar-powered pumps for irrigation, can help cut down subsidies on electricity supplies to the agriculture sector. According to a report from The Ministry of New & Renewable Energy, India is aiming to commission 20,000 MW capacities by 2022 under the National Solar Mission, which was launched in January 2010.

The Minister further added: “An additional 100 crore is set aside for the development of 1 MW solar parks on the banks of canals. Implementation of the Green Energy Corridor Project will be accelerated in this financial year to facilitate evacuation of renewable energy across the country.”

To boost wind and solar power generation, the Finance Minister announced a series of customs and excise duty cuts. He will extend 10-year tax breaks to power generation, transmission and distribution companies that begin operating before March 31, 2017.

Krishnan Pallassana, India Director, The Climate Group, commented: “The union budget 2014 has been by far the most promising for renewable energy sector by re-affirming its priority status. The budget has given the much-needed direction, clarity and significant financing toward our low carbon future. The budget aims not only to boost renewable energy investment, but also addresses power sector modernization through clean technology. The laudable budget is in the right direction; cautious but forward looking. By underlining climate issues and impacts, Mr. Jaitely has brought attention back to climate risk. I am hopeful a similarly informed and pragmatic approach will inspire India's international position on climate change.” [Read Krishnan's analysis here]

The newly formed Modi-led government plans on developing energy security, which includes harnessing renewable sources such as solar energy, biomass and wind power, along with coal, gas, hydropower and nuclear power.

The Climate Group's Bijli – Clean Energy for All program, which is principally funded by the Dutch Postcode Lottery, is also aiming to bring more solar to India. The project aims to reduce greenhouse gas emissions and enhance the lives of rural inhabitants in India, by deploying renewable energy technologies and improving infrastructure quality.

Read India's Finance Minister's budget 2014 speech

Krishnan Pallassana's analysis

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By Anisha Laming 

Image by World Economic Forum

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