The current budget continues to reflect the government’s focus on energy transition through a list of additional initiatives like:
1. Launching of PM- Surya Ghar Muft Bijli Yojna, since its announcement in interim budget, has received remarkable response, and will help larger penetration of renewable energy for household use.
2. A policy for promoting pumped storage projects will boost renewable energy penetration through storage integration.
3. A roadmap for moving from energy efficiency to emission reduction targets will further help in promoting RE power. Financial support to MSME for transitioning to a cleaner form of energy will further spread renewable energy in the industrial sectors.
4. Developing a taxonomy for climate finance for enhancing the availability of capital for climate adaptation and mitigation is a welcome step. We expect the Government to come out with detailed guidelines in the matter.
5. Exemption of custom duty on import of specified equipment’s for manufacture of solar cells and modules is a welcome step and will help further promote in house manufacturing of the same in the Country.
6. Move for custom duty exemptions on import of lithium and other related chemicals will promote battery storage solutions for better integration for providing RTC.
While appreciating the above policy framework, the industry expects that some of the following critical demands for promoting renewable energy in the county should be met through suitable amendments in the budgetary provisions:
1. Classifying renewable industry as a part of ‘Priority Sector lending’ and helping make available project finance at very competitive rates for RE projects.
2. Rationalization of indirect tax-GST rates on turbines and modules to be 5% each against existing 12%.
3. Exemption of ALMM for Corporate &Industrial projects.
4. Need for greater push on developing & promoting in house R & D facilities for development of latest technologies for cell, module manufacturing and their backward integration. To also promote in-house manufacturing of capital goods for the industry to avoid reliance on imports from third countries.
5. Renewable being a continuously growing industry, providing clean energy at competitive rates we request the government to reconsider extending concessional tax rates for new projects for a further period of 2 years.
