Union Budget 2024: Government allocates Rs 19,100 crore to new and renewable energy sector, shares rally – EQ

In Short : In the Union Budget 2024, the government has allocated Rs 19,100 crore to the new and renewable energy sector, signaling strong support for clean energy initiatives. This significant investment has led to a positive reaction in the stock market, with shares in the sector experiencing a notable rally as investors respond to the increased funding and commitment.

In Detail : Details showed that the government allocated Rs 8,500.35 crore to solar power (grid), showing a rise of nearly 79% against the revised estimates of the Budget 2023-2024.

With an objective to further boost the renewable sector, the government in Union Budget 2024 allocated Rs 19,100 crore to the Ministry of New and Renewable Energy against the revised estimates of Rs 7,848 crore for the Budget 2023-2024.

Cheering the development, shares of the renewable energy sector defied the market gravity and rallied up to 8%. Take this: shares of Borosil Renewables traded nearly 8% higher at Rs 515.80 at around 1 pm (IST). On the other hand, the benchmark BSE Sensex was down 0.58% at around the same time. Websol Energy Systems was up 2.61% at Rs 556. Waaree Renewable Technologies was up 1% at Rs 1,897.

Suzlon Energy locked in an upper circuit of 5% at Rs 57.82. The company on July 22 reported 200% rise in profit after tax at Rs 302 crore for the quarter ended June 2023 with net cash position at Rs 1,197 crore.

Details showed that the government allocated Rs 8,500.35 crore to solar power (grid), showing a rise of nearly 79% against the revised estimates of the Budget 2023-2024. Overall, the Total-Solar Energy segment received an allocation of Rs 16394.75 crore in the Union Budget 2024-2025 against the revised estimates of Rs 6041.56 crore of the Union Budget 2023-2024.

While presenting the Union Budget, Finance Minister Nirmala Sitharaman said, “Energy transition is critical in the fight against climate change. To support energy transition, I propose to expand the list of exempted capital goods for use in the manufacture of solar cells and panels in the country. Further, in view of sufficient domestic manufacturing capacity of solar glass and tinned copper interconnect, I propose not to extend the exemption of customs duties provided to them.”

In addition to this, the government allocated Rs 851 crore to the programme for wind and other renewable energy in the Union Budget 2024-25 against the revised estimates of Rs 946.30 crore. The government will also spent Rs 600 crore on National Green Hydrogen Mission. The revised estimates of Budget 2023-2024 stood at Rs 100 crore.

Bio energy programme received an allocation of Rs 300 crore from the Budget 2024-25 against Rs 75 crore last year.

Sachidanand Upadhyay, MD, Lord’s Mark Industries said, “Solar energy plays a crucial role in India’s aspirations to generate 500 GW of renewable energy by 2030 given that it is a vital component in the country’s efforts to reduce dependence on fossil fuels and combat climate change.”

“The Budget 2024-25 underscores a pivotal commitment to energy security and sustainability. The Finance Minister’s announcement of a forthcoming policy document on energy transition pathways is a significant step towards a greener future. The introduction of the PM Surya Ghar Muft Bijli Yojana is a transformative initiative while investing in rooftop solar systems representing a significant financial commitment by the Government,” Upadhyay added.

Manish Chowdhury, Head of Research, StoxBox said, “The key highlight of the budget is the fine balance between fiscal prudence and welfare schemes, with a special focus on Bihar and Andhra Pradesh.”

“With most pointers in line with the interim budget, the key takeaway is the downward revision to the FY25 fiscal deficit figure to 4.9% and an increase in capital gains tax. Though there is a tinge of populist measures on expected lines, the government remains focused on job creation, infrastructure development, strengthening the ecosystem for manufacturing, renewable energy and new sectors and creating disposable income in the hands of people with key focus on rural. The intention of the government looks pro-economy and adding wings to move the economy towards the $5 trillion mark in the near term,” he said.