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As the nation eagerly awaits the 2024 Union Budget, insights from industry luminaries shed light on diverse expectations spanning crucial sectors. From renewable energy incentives and logistics advancements to considerations for electric vehicles, battery storage, carbon credit markets, and supply chain resilience, these pre-budget perspectives offer a comprehensive outlook. Industry experts share their recommendations, outlining a roadmap for a balanced and sustainable fiscal strategy aligning with India’s economic growth and environmental aspirations.
“We expect that a quota should be mandated for the use of green hydrogen, ammonia and methanol in sectors like fertilizers, chemicals, steel, refineries, etc. Besides, the government should also consider implementing a nationwide policy mandating the use of Green M15 fuel i.e. mixing 15% green methanol with petrol, in transportation and other applicable sectors, supported by incentives for producers and consumers to adopt this fuel. It will help in demand creation and reducing production cost.
Besides, the government should also consider extending Section 115BAB of Income Tax up to 2030 for setting up of new manufacturing units for solar modules, electrolyzer and green hydrogen production.
To boost the sectors and achieve desired targets, GST should be kept nil, initially, on Green Hydrogen and its derivatives, whereas 5% GST should be reinstated on Solar Power Generating System and its related parts.
Like renewable energy generation projects, equitable interest rate should be levied for solar module manufacturing projects as currently these projects bear an additional interest of 50 bps.
We also expect that green hydrogen, and its derivatives should be included in the harmonised list of infrastructure sub-sectors as these sectors have the capability to transform the country into a Net Energy Exporter. Also, a mechanism should be developed to facilitate low-cost financing and provide benefits like accelerated depreciation for green hydrogen infrastructure investments.
Customs duty should be exempted for importing green hydrogen technologies, equipment for production of renewable power (such as solar modules), manufacturing of green hydrogen (and its derivatives), such as electrolyzers, fuel cells, other imported components, etc., until adequate manufacturing capacity is established in the country.
Last but not the least, the government should consider implementing a policy where each district with over 100,000 residents establishes a 50 MW solar plant. It ensures localized energy generation, reducing transmission losses and boosting energy security.”“With 2023 being the hottest year on record, tackling climate change has become imperative.The Production Linked Incentive (PLI) scheme, PM KUSUM Scheme, and solar park scheme have all been crucial government interventions in the industry. Now, it is imperative to go beyond budget allocations. For instance, last September, INR 3,760 crore was allocated as Viability Gap Funding (VGF) for the development and deployment of Battery Energy Storage Systems (BESS). We can take this further by focusing on market-facing allocations which can help in tapping a bigger market with a smaller pool of capital.
As India seeks to meet its ambitious RE targets, unlocking blended finance is crucial to ensure the growth of the RE sector. Public-Private Partnerships (PPPs) are important to scale up indigenous solutions and meet the government’s renewable energy goals.” |
