Budget Expectations 2016


Vishvesh Bhatia, Sr. General Manager / Sales & Marketing, APAR INDUSTRIES LTD., (Unit:UNIFLEX CABLES)

Our expectations from the budget is that Excise duty on materials being used for Renewable Energy ie., both Solar  & Wind may be exempted without MNRE so that dealers are able to stock the cable and it can be used for Solar Roof Top without Excise duty for smaller projects.

Additional duty may be levied on import of solar cables particularly on DC cables so that Government is able to protect the domestic manufacturers.  Indian cable industry is making lot of investment to enhance capacity for manufacture of Solar Cables so that they are able to meet requirements of Solar Plants ie, life of the cable should not be less than 25 years.  Even we made lot of investment in establishing E Beam Plant for irradiation cables which guarantees life of the cable of 25 years.

Budget may provide developers soft funding with low rate of interest so that they are able to generate energy at a low cost.  We also expect that budget may give tax exemption so that they are able to develop and generate energy at low cost since they produce green energy.

We should not forget that India is running the largest Renewable Capacity in the world and to meet this target Govt must encourage the Renewable Energy Plants so that India is able to meet the largest target of the world.

Mr Hartek Singh, CMD, Hartek Group

Renewable energy, particularly solar power, will drive the growth of the Indian power sector in coming years. The Centre should take concrete fiscal measures to turn India into a leading global solar powerhouse by creating a strong manufacturing base. The recent push to increase the budget in roof top sector was very encouraging. Overall by and large the government has been very proactive when it comes to renewable energy sector and we are satisfied with it.

Mr. Anirban Sen, Director – Infrastructure Fund, Kotak Investment Advisors Limited.

In the previous budget and in various forums held subsequently, the Government has outlined that it intends to simplify the tax regime by reducing the corporate tax rate and simultaneously withdrawing various tax incentives. Investors would appreciate if a clear and definitive path regarding the proposed changes is outlined in the budget.

Also, there are certain benefits (e.g., 80 IA, reduced withholding tax) that, based on our current understanding, are expected to expire over the next few years. At the same time, there is an expectation in the industry that some of these benefits may be extended from time to time. Clarity on regulatory and tax matters over a longer term, say 10-12 years, would enable investors to have greater certainty and visibility on cash flows and return estimates.

One key area of concern for all participants in the renewable energy sector is related to stability of the grid when renewable energy becomes a more material component of power generation. While some steps towards partially addressing this issue has already been taken by the Government by initiating construction of green energy corridors, the Government can consider introducing incentives in the next budget along with a policy framework for creation of grid level storage solutions that would address the intermittency and variability issues associated with wind and solar power generation.

Mr. G Krishnamurthy (Chief Executive - L&T Infrastructure Finance Company Limited)

We expect the budget to address the prevailing structural headwinds in the broader power sector and help create conditions for realizing the ambitious renewable targets. The measures could    include a clear fiscal incentive roadmap (including their withdrawal) on a medium term basis, a robust contract enforcement framework, transmission infrastructure approach and a uniform national policy framework e.g. for third party sale, wheeling and banking charges and so on. Essentially more we de risk the model more capital flows the sector would attract, and at lower costs so that consumer also wins.

Wish list:

•    Sunset clause for the 10 year tax holiday for power generation, distribution and transmission of power (available till FY 2017) should be extended by another 5 years

•    Power sector may be kept out of the purview of MAT so as the sector could avail the benefit u/s 80IA fully

•    Clarity on availability of Generation Based incentives for renewable players, post 12th Five year plan

•     Utilize national Clean Energy Fund more effectively e.g. to provide stability to IPPs through liquidity support for delays in receivables, development of a vibrant trading market for renewable Credits (for RPOs) so that states best suited to generate renewable power focus on generation and others share the cost and benefits. Essentially instead of each state reinventing the wheel, we should be guided by a national mission that enables equitable responsibility distribution.

•    Encourage capital based or tariff based incentives for new and important initiatives like energy storage, roof top, smart grid etc. just as Gujarat's solar policy in early days galvanized the entire solar sector.

Rajaram Pai, Business Leader, DuPont Electronics & Communications and Photovoltaic Solutions, South Asia

 “India is currently dependent on solar panel imports to support the solar growth charted by the PM’s vision to achieve 100GW by 2022. Import dependence is largely on account of two critical factors: Capacity inadequacy at the local solar manufacturers to meet 100% demand and high cost of local currency financing. The two factors are inter-related.

New 3.5 ~ 4 Gigawatts of solar installation are expected to come on-stream in 2016. The gap is a definite opportunity for local and overseas companies to “Make in India for India”. Government needs to make provisions for providing competitive rates of financing to attract near and long term investments, necessary for augmenting capacities and addressing technology efficiencies for staying relevant in the market.

Additionally, in-country R&D efforts are needed to keep pace with the manufacturing growth and private entities are challenged in setting up individual R&D centers. The Union budget needs to consider allocating dedicated investment and resources for promoting research and development of solar technologies within the country. This can be through a collaborative set-up between the Indian government, public sector agencies and private sector resources”

Mr. S. C. Bhargava, Senior Vice President and Head of L&T Electrical & Automation

The ‘Make in India’ an initiative will surely give a boost to the solar segment. We are quite hopeful that this budget will address issues related to land acquisition and power evacuation infrastructure.  I am sure the country will see an impressive growth in this segment.  

Solar products are exempted from tax in the current regime of excise and VAT, and the same should continue even in the GST regime as and when it is implemented.




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