Power and Renewable Energy sector is given a share of 22,000 crore in Budget 2020 by Finance Minister Nirmala Sitharaman. The solar power sector gets an increase of 10.4 percent in comparison to last year’s revised budget.
However this is 52% less than the total allocation to coal which somehow don’t go with the vision of India’s commitment of moving away from coal and generating 40% of its energy from non fossil fuel sources .
Proposal of Reduction in corporate tax and abolishing dividend distribution tax is a welcome step and this will certainly encourage investors to invest in renewable energy sector , though the raised tariffs on import of solar cells and modules and other green energy equipment has come as a dampener.
PM KUSUM Scheme which aims at installing on-grid and off- grid solar pumps has got a lion share of budget. It is an ambitious scheme to help the farmers increase their income by selling surplus power, thus reducing electricity subsidy burden and help in expanding ‘distributed renewable energy’ capacity.
On ground, it has many challenges like
- it will results in over exploitation of ground water
- though it is aimed at reducing subsidy burden of state discoms but it fall short of having clear goals or provision to ensure subsidy reduction
Electric Vehicles and Geothermal Energy again gets a raw deal in Budget 2020 which does not augur well with the overall development of renewable energy sector.
India has vast resources of renewable energy and if proper budget is allocated to these resources and they are tapped and harnessed properly then it has the potential of reducing the dependency of fossil fuel based energy generation by half within couple of years .
A ‘Clean-Future Exclusive’ contributed by Zartab Haider Jafri, Managing Director-Maksus Mimer Energy Solutions India Pvt. Ltd