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The Union Budget was announced on February 1, 2020, by the Finance Minister, Nirmala Sitharaman unveiled a set of reforms to re-energise the renewable energy sector and boost the Indian economy by allocating of Rs ₹20,000 crore to tackle climate change and pollution by introducing a slew of sustainability initiatives and advanced technologies. Industry experts opine on the post-budget reactions, and analyse its impact on the renewable energy sector.
Sumant Sinha, Chairman and Managing Director, ReNew Power
“The Union Budget 2020 is a balanced and pragmatic statement of intent. Finance minister, Nirmala Sitharaman in her speech has attempted to address the trust deficit across a host of sectors. She has assured stock market investors by abolishing dividend distribution tax , addressed concerns of start-ups with respect to ESOPS and in the renewable energy sector through strengthening of contracts act and lowering of corporate tax rate for new energy companies. While there was pressure to move away from fiscal responsibility, the government has chosen to walk a middle path by allowing for an acceptable increase in fiscal deficit while putting some extra money in the hands of taxpayers.”
Nikunj Ghodawat, Chief Financial Officer, CleanMax
“The Union Budget 2020 has a few positive inclusions. For the Renewable Energy Sector – the extension of the 15% and 22% tax rate to the new and existing power generation companies, which was earlier only earmarked for the manufacturing sector, is a welcome move. While the fine print is still awaited, the new personal income tax structure should help to increase liquidity at the hands of the individuals, which will have a trickle-down effect to boost demand and consumption across multiple sectors”.
Saif Dhorajiwala, Co-Founder & ED, Fourth Partner Energy
“The ₹20,000 cr corpus dedicated to the RE sector to tackle climate change and pollution, announced in the union budget reflects India’s commitment and the urgency to transition to clean energy sources. We await further clarity on new schemes around smart meters and grid infrastructure. The government’s intentions on solarizing the Indian railways and expanding the KUSUM scheme to include 20 lakh farmers will give a good boost to solar power in the rural segment — where the impact will be highest, as it will address the issues of energy access, affordability and climate in a single stroke. Another key announcement made by the Finance Minister is the abolition of the Dividend Distribution Tax (DDT), which is a good move as it makes investments more attractive.”
Gautam Seth, Joint-Managing Director, HPL & Electric Power Ltd.
“The annual budget announced by the Finance Minister has given special impetus to the power and infrastructure sector and allocation of Rs 22,000 crore for renewable and power sector is going to push for faster development and growth across the sector. The announcement made to replace energy meters with pre-paid smart meters will help in complete digitization of the whole system and would help in bringing about more financially healthier utilities. The FM has urged state governments to implement smart meters in the next three years and HPL being one of the leading manufacturers of smart meters sees this as a huge opportunity. In addition, the implementation of five Smart city projects in PPP mode will give more opportunities to the private companies.”
Sanjeev Aggarwal, Managing Director & CEO, Amplus Solar
“The overall impetus on long term reforms in the power sector is very encouraging and it was noteworthy to note that India stands committed to its international sustainability commitments. The focus on bringing down the commercial losses in the distribution companies by mandating prepaid meters, coupled with consumers having the ‘choice of suppliers’ will surely resolve the long term viability issues of the power sector and lead to a vibrant electricity market. The usage of solar in the railways and farming, and usage of farmlands for solar plants will open up new entrepreneurial opportunities and help in faster adoption of solar energy across the country. We are also encouraged by the support extended to NBFCs and infrastructure funds that can improve much needed liquidity. Also, the slew of tax incentives offered to foreign investors for investments in priority sectors will boost inwards equity flow in the infrastructure sectors.”