Budget 2020 Reaction on Power, Renewable and NBFC Sector –
Dr Pawan Singh, Managing Director and CEO, PFS (PTC India Financial Services)
Having provided for supporting the national infrastructure pipeline worth 103 lakh crore, announced in this budget the government is banking heavily on infrastructure to power growth of the country. The power and renewable energy sector has been allocated 22,000 crores and solar energy has received a major push in the budget with announcements like allowing generation of solar energy in barren land of farmers, proposal of solar panels along railway tracks and target of 38GW of renewable energy under the second phase of solar rooftop programme, etc. The new power generation companies will now have to pay just 15% tax under the new corporate tax regime which will help to set up new power generation including renewable companies to meet growing energy needs of the country.
Also, the announcement of government’s intent to guarantee securities floated to provide liquidity for NBFC’s is also expected to help in tiding over the current liquidity crunch.
Further abolition DDT would help infra companies and Infra finance who have been paying DDT in past to use retained earnings for further business.
Private Equity has been playing significant role in Renewable space in India and they had to grapple with equity V/s CCD/OCD which we consider more tax efficient how direct equity can flow into renewable space. Budget is going to support Renewable Infra & Renewable Infra Finance Companies.
The tax support provided to Sovereign funds to invest in infrastructure sector. This will support to infra sector and investment in renewable space. This is again big boost to NBFC Infrastructure Finance companies.