Renewable energy: Budget takes a stride in the correct direction

Live Mint , Sunday, March 01, 2015
Correspondent : Rahul Munjal
In the backdrop of US President Barack Obama’s recent visit to India and the much talked about Paris Cop21 (the 21st session of the conference of the parties to the United Nations Framework Convention on Climate Change), clean energy has found a much-needed noticeable voice on a global platform. Countries across the world are taking note and making smarter decisions. Walking the talk, finance minister Arun Jaitley has taken a stride in this direction in the budget for fiscal year 2015-16. Overall, this is a good budget for the corporate sector but its more directional and we’ll wait to see the fine print. It has a positive thrust on infrastructure and is very good for the financial sector and the real estate sector. Climate change and the alarming hike in carbon emissions is every individual’s worry. India needs to bring down carbon emissions to acceptable global standards. The radical effects of climate change are already being witnessed with unfathomable tragedies. From the Uttrakhand cloudburst to the blizzard in New York, climate change is here today. We need to address the situation now with clean energy solutions. Our intellectually honest, reformist government has foresight. With a developmental agenda, the government identified the need to take environmental caution into consideration and has set targets for renewable sources of energy. The Economic Survey addresses our fight related to climate change. According to the Economic Survey report authored by Arvind Subramanian, the government’s chief economic advisor, the government plans to scale up total renewable capacity to 170 gigawatts (GW) from 33.8 GW. Our finance minister reiterated the point in his budget speech. As part of this renewable energy plan, Prime Minister Narendra Modi has planned to increase the capacity of solar energy fivefold to 100 GW by 2022. The overall industry stands to gain from several announcements in the budget, be it the deferred general anti-avoidance rule (GAAR) for two years or lowered corporate tax from 30% to 25% over the next four years. Setting up committees for public debt management, and the proposal for a monetary policy committee will also have a positive effect. Holding companies for public sector banks is also a credible move. And above all, the clarity on the goods and services tax (GST) is much appreciated. Although, I would have liked to see more on the fiscal deficit trajectory. Concrete steps to address the revenue deficit, which would affect India’s sovereign rating and, in turn, the cost of foreign funds, would have been welcome. As our minister spoke about 8-8.5% gross domestic product (GDP) growth, he also hinted his aspiration to achieving double-digit GDP in the coming years. He clearly understands the need for the Centre to spend on infrastructure, thereby increasing the outlay to Rs.70,000 crore. He ingeniously proposed another Rs.20,000 crore to set up a national investment infra fund. This could be leveraged several times over to achieve significant impact. He spoke about tax-free bonds in rail, road and irrigation sectors. I would wish to see renewable energy included as one of the beneficiaries of the infra fund as well as the tax-free bonds. REIT tax clarity is also a positive move, with the assumption that the same would be there for infra investment trusts. The coal cess is doubled to Rs.200 and will give the exchequer more than Rs.10,000 crore. I would urge the minister to use these funds obtained from dirty energy for generation of clean energy, especially since he has announced five ultra mega power projects of 4GW. With these announcements in the budget, the government has lent an aggressive support to its agenda and initiatives. Although on renewables, per se, a lot more should have been done. Announcements on plans to address transmission, distribution, giving visibility for funds for the renewable sector, along with long-term funds such as pension funds, EPFO or even some support pool for foreign exchange hedging would have made it a dream budget. This single focused target of green energy achievement shall provide multiple solutions to our problems—environment, health, basic amenities and an improved standard of living in a Swachh Bharat, with swachh hawa (clean air). With a 2022 timeline, there is an automated accountability format in place. The road map is created. Solutions for a better India; a better planet. We are on the threshold of change.
 
SOURCE : http://www.livemint.com/Opinion/EXEeS7xtEkPpx142QSl0xN/Renewable-energy-Budget-takes-a-stride-in-the-correct-direc.html
 


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