The interim budget is pro-growth and provides a massive boost to propel domestic consumption through a) Income Tax sops for nearly 30 million income taxpayers b) Improved financial health of 120 million marginal farmers. The budget also gave a boost to ‘Make In India’ by focusing on manufacturing and enhancing infrastructure and rural connectivity. It is aligned to the objective of overall economic growth, Nation building and job creation. This budget, takes into account various stakeholders across the spectrum, right from the agriculture sector, social sector, industry, young India and the senior citizens.
The RE industry welcomes the government’s focus on clean energy being the major source of energy security for the country. Prime Minister’s mission of bringing an Electric Vehicle revolution to India by 2030, where renewable energy will be used to power EVs to tackle the issue of climate change is a great initiative and will boost the clean energy market. Also, we hope that with the capital infused in the banking sector and banks coming out of PCA will help in infusing more funds to renewable energy projects.
However, it will augur well for the industry if the FM will consider the following in the full Budget:
- Re-introduction of Accelerated Depreciation and 80IA for renewable energy projects – Accelerated depreciation @80% and 80-IA benefits should be re-introduced for windmills and solar projects to retail investors with project size less than 25 MW. This will also benefit Central Public Sector Enterprises (CPSEs)
- GST Related – GST on services relating to setting up, power evacuation and operation & maintenance services (OMS) of a Renewable Energy Project should also be kept at 5% (that is the same GST rate as applicable on renewable energy equipment) from the present 18%
- Export incentive – To achieve manufacturing target of 10,000 MW+ per annum, by increasing export incentive from 2% to 6% , to make Indian exports competitive in the global market
- Concessional Rate / Preferential Rate of Finance – 2% Rebate – RE sector is growing, however cost and availability can potentially impact viability, hence concessional rate/ preferential rate of Finance is required with 2% rebate
Overall the measures on ease of living, job creation, encourage consumption, digital, clean and green India, it is definitely a well thought out budget.