Experts hail doubling of cess on 'dirty' coal

Money collected from the cess gets deposited in the National Clean Energy Fund but doubts remain over its usage

By Ankur Paliwal
Published: Thursday 10 July 2014


The finance minister’s proposal of doubling the coal cess which gets deposited in the corpus of National Clean Energy Fund (NCEF) has been hailed by renewable energy experts. There is, however, uncertainty over its expenditure, they point.  

NCEF was introduced in the Union Budget 2010-11 for promoting clean energy initiatives in the country. A cess of Rs 50 per tonne was levied on dirty coal, which has now been increased to Rs 100 per tonne. NCEF has made a corpus of Rs 10,127 crore till March 2014. Around 70 per cent of this fund is lying unutilised. With doubling of coal cess, the projected increase in NCEF expected to be around 6,800 crore in 2014-15. 

“Till date, a little more than one per cent (Rs 500 crore) has been disbursed to the Ministry of New and Renewable Energy, but barely Rs 1.6 crore has been spent so far on renewable energy projects by the ministry in the past three years,” said Nayanjyoti Goswami, programme director, renewable energy at Delhi-based non-profit Centre for Science and Environment. “The ministry has been complaining that they never received the allocated fund in time to spend on various renewable energy initiatives. According to them, the total annual allocation is Rs 3,500 crore,” he added.

In the past, the funds from NCEF have mostly been used either to meet budget shortfalls in routine projects or to deploy existing technology, and not on research and innovation in clean energy. For instance, the Ministry of Finance approved Rs 200 crore for “preparatory activities” for the environment ministry’s Green India Mission. “What research and innovation is there in preparatory activities? Funds for the mission should come from the environment ministry,” says Gyana Ranjan Panda, policy researcher with Delhi NGO Centre for Budget and Governance Accountability. The new government should focus on spending the fund strictly on research and innovation in clean energy, say experts.
“Looking at the current pace of investment, it is doubtful that we will be able to meet the set objectives apart from building a corpus for no use,” said Goswami. 


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