The Finance Minister Nirmala Sitharaman will present the budget at 11 am on February 1, 2021, Ahead of the budget session, India’s chief economic advisor, Krishnamurthy Subramanian presented the economic survey on Friday.
Installed generation capacity addition in the power sector was driven by the government in the year 2019-20. The survey, tabled in Parliament by finance minister Nirmala Sitharaman on Friday, showed that about 60% of the nearly 7,000-mw added in the financial year was by Central PSUs and the remaining by state generation companies. This is against about 5,500-mw added a year ago, in which nearly 2,000-mw were added by CPSUs and about 3,000-mw by state PSUs and about 500-mw by the private sector.
The survey said, “The power sector has witnessed substantial transformation from both the demand (universal electrification) and supply-side (the advent of green energy). Commendable progress has been made in the generation and transmission of electricity in India.”
While various economic packages and reforms announced by the government in 2020 have no doubt kept the economy afloat, Budget 2021 is also being looked upon as a watershed event which is expected to lift and give an impetus to the economy.
Let’s see what the experts have to say:
The Finance Minister should put into place a comprehensive policy and regulatory framework to encourage firms to invest more in innovation and technology with the larger objective of bringing about a transformation in the power sector. The skewed tariffs of downstream distribution utilities should be rationalised vis-à-vis the cost structure to optimise cross-subsidy and create competitiveness in the industry. Measures to facilitate timely payments from states to upstream utilities will take care of cash flow constraints.
We also expect the Finance Minister to incentivise investments in R&D in renewables and storage technologies. The government should create a robust ecosystem for indigenous solar manufacturing through allocation of more funds, extension of financial assistance on term loans, upfront central financial assistance on CAPEX and exemptions in basic custom duty to units in Special Economic Zones to realise its vision of Atmanirbhar Bharat. It should create a separate category for renewable energy under priority sector lending to enable independent power producers to get more funding from banks. Let us capitalise on the Indian Renewable Energy Development Agency further and create a specialised infrastructure funding institution which can refinance operating assets at competitive rates.
Hartek Singh, CMD Hartek Group
“To give a boost to India’s solar industry, the budget should focus on addressing the challenges of investors and consumers and also giving a financial boost to make it future-ready. Govt. policies should, therefore, provide synergy to further expedite the growth of the industry by doing the followings in the coming budget:
- Renewables to be covered under priority sector lending with competitive interest rates.
-Bid bond/PBG requirements to be removed from Central and State bids as industry has matured.
-Provide positive synergy to renewable industry by removing anomalies in indirect tax laws and providing composite rate of GST at concessional 5%, expediting eligible refunds due under current inverted duty structure.
-Duty exemptions on import of modules to be extended to ensure demand supply mismatch is not there.”
SK Gupta, CFO Amp Energy India
“We expect the government to have a strong focus on renewable energy in this budget as in previous years. As a SaaS startup offering solutions for solar companies globally from India, we are excited about how the government has been vocal about India taking a leadership role in the clean energy wave. We believe that AI solutions are getting widely adopted for managing solar assets globally and India is no exception and are hopeful that stimulus for the sector in the budget will drive growth for the industry.”
Rahul Sankhe, Co-Founder & President, SenseHawk
” With the present government focus on manufacturing with special Atma Nirbhar Bharat & make in India campaign, but still the sector needs more incentives to grow. As per McKinsey report Modi government’s initiatives to boost manufacturing in India, the sectoral growth fell to 7.4 per cent per year over the last six years, compared to 9.5 percent per year growth during FY2006 and FY2012. Also, India’s manufacturing sector share of employment increased by just one percentage point. More favourable incentives and schemes are needed for the manufacturing to grow in India. Therefore, I request the government to review the policy for the manufacturing sector.
The government should encourage domestic manufacturers & promote innovation in the sector so that newer technologies are introduced in the sector. With regard to GST, We request the government to declare UPS with battery as composite supply and UPS GST of 18% should apply to all components. Further, to remove confusion, GST on all types of battery being used in capital investments, in offices, homes etc. should not be treated as luxury items. It should have an uniform rate of 18% GST only.”
RK Bansal, Sumath Kumar, Rajesh Kumar, UMDA Members (Umda, UPS association in Southern india)
Budget Impetus: Nurture and Grow the Metals Sector for making India an Alternative Global Manufacturing Destination
“With an urgent need to put Indian economy on a growth track in 2021 and undo the aftereffects of the pandemic expectations from the upcoming Union Budget are quite high. Recent fiscal measures taken by the Government have been highly praiseworthy. It is now even more important to ensure that specific measures are announced in the upcoming budget which pull the metals sector out of an ongoing challenging phase. 2021 will see global supply chains getting reworked providing India a great opportunity to become a global leader in non-ferrous metals like Aluminium, Copper and Zinc. The metals sector is also fundamental to the revival of the Indian manufacturing ecosystem, realization of the dream of an Aatma Nirbhar Bharat and positioning India as an alternative global manufacturing destination.”
“The correction of inverted duty structure with reduction of import duties on critical raw materials of the Aluminium value chain in the upcoming union budget will go a long way in made in India aluminium bridging the competitive gap it faces with respect to other major global Aluminium producers. With Aluminium production costs in India amongst one of the highest in the world, an immediate support pertaining to rationalization of power cost by reducing high cess on coal to support power intensive industries like aluminium is recommended. Lastly, removal of the long overdue anomaly in differential import duties on primary aluminium and aluminium scrap will help arrest the flooding imports majorly from China, ASEAN and the US”.
Rahul Sharma, President – Aluminium Association of India and Dy. CEO – Aluminium Business, Vedanta Ltd.