India needs to invest in clean energy to meet targets

Industry says announcement of loans and performance-based incentives in budget will invigorate sector

 
By Kundan Pandey
Last Updated: Monday 17 August 2015

image

Most nations are betting on clean energy options to reduce their dependence on fossil fuel. India is no different. The country has set an ambitious target of adding 100 GW installed capacity of solar power and 60 GW of wind energy by 2017.

Experts warn the Union budget will have to allocate substantial amounts to the clean sector if the government is serious about the targets. “The primary expectation of the renewable industry is higher allocation of funds for the ongoing programmes,” says Jasmeet Khurana, a researcher with energy think-tank, Bridge to India. He adds that the money the government had set aside for clean technology in the past few years was finally used to balance the country’s deficits.

Industry players are also hoping that the budget will announce interest rate subvention for solar projects through government-supported foreign exchange hedging mechanism. They say that even a mention of this in the budget will give a boost to the sector. They are also hoping for a reduction in minimum alternate tax (MAT) and the introduction of a broad-based tax credit incentive, which is followed in the US. “However, it is unlikely that all of these would be brought in,” says Khurana.

Jyotsna Goel, senior research officer, Centre for Budget and Governance Accountability (CBGA), says the support can be in the form of “funds to create intra-state grid connectivity for renewable energy, revive renewable energy certificates market and improve the penetration of Indian Renewable Energy Development Agency loans for installing rural application of renewable energy technologies”.  

The Centre should also monitor the clean energy performance of state governments. “Some of these initiatives are expected in the budget,” says Goel.

Gaurav Kumar Kedia, chairperson of Indian Biogas Association (IBA), says the government has to support the private players in the sector by providing performance-based subsidies. 

 


Report on India’s renewable electricity roadmap 2030: towards accelerated renewable electricity deployment

Subscribe to Weekly Newsletter :
Related Stories

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.

  • Good article. Creation of a

    Good article.
    Creation of a Renewable Energy Fund and giving Tax Exemption to investment in this fund under Section 80C will pave the way for wider participation of People in Renewables besides providing huge funds for Renewables. Already depreciation and other benefits are available to big industries and business houses who set up Wind Farms ,solar Farms etc.
    Dr.A.Jagadeesh Nellore(AP)

    Posted by: Anonymous | 5 years ago | Reply