Mr. Sumant Sinha, Chairman and CEO, ReNew Power The Union Budget of 2017-2018 is extremely balanced containing a lot of positives. While strong on reforms, fiscal numbers and macroeconomic parameters, the Budget has aimed looking to boost the rural and agriculture sectors. The tone of the recently announced Budget remains largely neutral in terms of maintaining a sustainable fiscal consolidation roadmap. The fiscal deficit of 3.2 percent is in-line with expectations which will be looked at as a positive by the bond and debt markets. The reduction of corporate tax rate for companies below 500 million rupee turnover will encourage higher compliance at the lower level of the corporate pyramid where percentage of tax leakages is usually much higher. Also, the abolishment of the FIPB (Foreign Investment Promotion Board) is is a great move as it will clearly speed up the process which will have a positive effect on the intent of Foreign Investors to invest in our country. Last but not least, the decision to bring Affordable Housing under Infrastructure will undoubtedly provide a timely boost to the sector along with its allied sectors like steel and cement. On the renewable energy front no mention of GBI for the wind sector has been a disappointment.
However, roll out of the second phase of solar development of another 20,000 MW will go a long way in cementing India’s position in the global solar industry. With the Railways also going the solar route, it signifies a significant change towards the use of green and clean energy for one of the largest modes of transport in the country. The increase of 35 percent of expenditure allocation to rural electrification schemes shows extremely progressive thinking when keeping the long term target of meeting 100 percent electrification by 2018 in mind. All in all, it is a Budget that should revive demand, lead to greater industrial activity and thereby increase overall demand for energy as well.
