Interim Budget 2024-25: A Green Vision for Sustainable Growth – Expert Analyses and Industry Perspectives

Today, Finance Minister Nirmala Sitharaman presented the Interim Budget for the fiscal year 2024-25 in a speech delivered at the Parliament.

In a significant move towards sustainable energy, the government introduced a rooftop solarization initiative, aiming to provide one crore households with up to 300 units of free electricity per month. This program aligns with the Prime Minister’s vision, declared on the historic day of the consecration of the Ram Mandir in Ayodhya. Anticipated benefits encompass annual savings of fifteen to eighteen thousand rupees for households, electric vehicle charging, entrepreneurship opportunities for vendors, and employment prospects for youth skilled in manufacturing, installation, and maintenance.

To fulfill the commitment of achieving ‘net-zero’ emissions by 2070, the Budget outlines measures such as providing viability gap funding for offshore wind energy, establishing a 100 MT coal gasification and liquefaction capacity by 2030, and mandating phased blending of compressed biogas in natural gas for transport and domestic purposes. Financial assistance for biomass aggregation machinery procurement to support collection is also in the offing.

Furthermore, the government will bolster the electric vehicle ecosystem, promoting manufacturing and charging infrastructure, with a focus on encouraging the adoption of e-buses for public transportation. A novel scheme, the bio-manufacturing and bio-foundry initiative, aims to propel green growth by offering eco-friendly alternatives like biodegradable polymers, bio-plastics, bio-pharmaceuticals, and bio-agri-inputs, transforming manufacturing paradigms towards regenerative principles.

Referring to the budget that backs the development of clean energy, electric vehicle manufacturing, and charging infrastructure, our industry experts have stated:

The budget’s focus with measures on green energy continues to reinforce the commitment towards achieving energy transition in the long run. The Viability Gap Funding (VGF) scheme for offshore wind energy is expected to improve its cost competitiveness, and will further aid the renewable capacity addition in the long run. Further, measures for the promotion of roof-top solar remain positive for the renewable sector. Given the abundant coal reserves in the country, the stated intent to implement a 100 MT coal gasification & liquefaction facility will benefit the chemical sector, through improved domestic synthetic natural gas availability and lowering the import dependency on ammonia & methanol in the long run. Further, the proposed expansion of nano DAP application in all agro-climatic zones would benefit the fertilizer sector through lower imports as well as subsidy requirements. This apart, the mandatory use of compressed bio-gas in CNG & PNG is a step in the right direction, to meet the growing requirements of natural gas in the country and is also expected to benefit the entities in the city gas distribution sector through lower dependency on imported LNG.

Girishkumar Kadam, Senior Vice President & Group Head – Corporate Ratings, ICRA Ltd.

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The budget announcements towards Renewable Energy showcase a progressive approach by the government. Specifically, the initiatives aimed at promoting rooftop solarization signal a strategic framework to leverage India’s substantial residential market for renewable energy adoption. Additionally, the announcement of viability gap funding for offshore wind energy projects, with a focus on capacities up to 1GW, is a welcome move. This provision addresses a critical need in propelling the growth of offshore wind energy which had gone on a flat trajectory in last few years.

While the demand market has been incentivized, relaxations in import taxes would have parallelly helped the generators achieve the targets associated with the rise in energy demand till local manufacturing stabilizes.

Sharad Pungalia, MD & CEO, Amplus Solar

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The announcement of viability gap funding for offshore wind as a measure to meet India’s net-zero commitment is welcome as the sector needs some support to kick start. As per CEEW’s analysis, while 65 per cent of the USD10 trillion of investments required for India to achieve net-zero by 2070 can be mobilised from conventional sources, the balance 35 per cent will need interventions. Further, wind as a generation source is also critical for our nearer-term energy ambitions. In fact, per the CEA’s own assessment, wind capacity would have to grow 2x from its current 44.7 GW to 100 GW by 2030 to meet the expected increase in power demand in the country by then.

Gagan Sidhu, Director – CEEW Centre for Energy Finance (CEEW-CEF)

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Today’s Budget announcement on rooftop solar further emphasises the active role Indian citizens will play in the country’s energy transition and supporting India’s climate commitments. Analysis by the Council on Energy, Environment and Water (CEEW) suggests that 20-25 GW of rooftop solar capacity would be supported through solarisation of 1 crore households. Further, given that residential consumers receive subsidised electricity from discoms, solarisation of the demand from these households will save about INR 2 lakh crore for discoms over the next 25 years (the solar plant’s life). All states can leverage this opportunity as rooftop solar potential exists everywhere, unlike utility-scale solar, which is primarily restricted to seven RE-rich states. CEEW analysis has already established the 637 GW of technical potential in India for rooftop solar.

Neeraj Kuldeep, Senior Programme Lead, Council on Energy, Environment and Water (CEEW)

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India’s commitment to rooftop solarization and harnessing offshore wind energy marks a pivotal step towards a sustainable future. The one crore households benefiting from rooftop solar will not only experience freedom from electricity bills but also actively contribute to the nation’s green energy landscape. The provision of viability gap funding for offshore wind energy underscores a visionary path to achieving net zero by 2070. BluPine Energy applauds these initiatives as they align with our mission to drive innovation and transformative change in the renewable energy sector, and the profound impact they will have on our nation’s renewable energy landscape and our collective responsibility towards a greener, more sustainable future.

Neerav Nanavaty, CEO of BluPine Energy

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The budget has laid a roadmap for ensuring a green gas-based economy in India. The policy mandating phased blending of CBG for CNG and PNG will help in greening the gas supply chain and balancing the demand-supply for clean fuels. Financial assistance for procuring biogas aggregation machinery would tremendously help in energizing the biofuel segment. We feel this budget has created a conducive environment for the trading of clean and eco-friendly biofuels, in alignment with India’s net-zero goals.

Rajesh Kumar Mediratta, MD & CEO, Indian Gas Exchange

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Hon. Prime Minister’s Suryoday Yojana is a fantastic step towards India’s commitment to driving growth powered by sustainable energy. We hope and look forward to all authorities and DISCOMS facilitating implementation with full support. We at Oorjan are committed to working with ecosystem partners and customers to offer green energy under this initiative.

Gautam Das, CEO and Founder of Oorjan

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Various initiatives announced by the FM today clearly demonstrate the government’s intention to further accelerate EV adoption and also generate significant employment opportunities for the youth. It is encouraging to see the focus on research and innovation to further grow the EV ecosystem. We believe that as the govt rolls out details of the scheme in the coming days for growing the EV public charging infrastructure, the availability of public chargers across the country will significantly grow and EV companies like ours will find higher market acceptance from its consumers and also attract investor interest. This will also break the ‘range anxiety’ , the biggest barrier for EV adoption in our country. The government’s support in providing financial assistance and support to EV manufacturing will encourage entrepreneurs to do deeper innovation in the battery management segment and other technologies. Growth in EV charging infra will also generate employment opportunities for the youth as companies will be on a look out for people with technical know-how of running and maintaining charging infra. EV companies will also enjoy a deeper vendor ecosystem providing battery and other components for building make in India EV vehicles.

Dinesh Arjun, Co-founder and CEO, Raptee Energy

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The establishment of new infrastructure corridors for ports, energy, minerals and cement will boost manufacturing and supply chains. Doubling the number of airports to 149 will energized the aviation sector. As a manufacturing-focused company, we welcome the government’s aim to enhance the EV ecosystem through manufacturing and charging infrastructure support. The proposed bio-manufacturing scheme for green growth aligns with our sustainability mission.

Rahul Garg, Founder and CEO, Moglix

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The Interim Budget focused on key sectors and one of the promising ones is Electric Vehicles (EV). The initiatives will enhance and fortify the EV ecosystem by bolstering manufacturing and charging infrastructure. Additionally, the encouragement of greater adoption of e-buses for public transport networks through payment security mechanisms is a notable benefit. These investments not only pave the way for increased EV sales and adoption but also open doors for burgeoning job opportunities and entrepreneurial ventures within the sector. These efforts remain dedicated to driving India’s green mobility revolution forward. There is also an anticipated outcome in the form of economic empowerment which will equip the youth with valuable technical skills, ensuring a robust workforce for the manufacturing of EV chargers, and associated equipment. We look forward to the July budget where the focus will be on Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II) scheme and much-anticipated FAME III scheme.

Pratik Kamdar, CEO & Co-Founder, Neuron Energy

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The solar rooftop schemes will be a big boost to not only meet our goals for clean energy, but will also set up India to start addressing the EV charging infrastructure that is currently holding back wider adoption of EVs. It will also create enormous jobs for installation, manufacturing and maintenance of solar infrastructure and a secondary effect will be opportunities available for startups to build on this. Extension of tax benefits for sovereign wealth funds expiring on 31st March 24 to 31st March 25 is a good signal from the government to indicate that there will be continuation of beneficial policies and friendly institutional investor policies”

Mayuresh Raut, Co-founder & Managing Partner, Seafund

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The reiteration to become a net-zero economy by 2070, showcases Government’s commitment to mitigate the environmental issues across the country. The initiative to harness offshore wind energy potential is aimed at encouraging the dependency on renewable energy to minimize the pressure on depleting natural resources. With the country making great strides to achieve a sustainable future, the announcement for green energy will expedite faster adoption of clean energies across the sectors that will immensely contribute to reducing the carbon footprint of the country.

Deepak Pahwa, Chairman, Pahwa Group & Managing Director, Bry-Air

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We see the Union Budget 2024 highlights as progressive from the renewable energy and climate change mitigation perspective.

Apurve Goel, Director, Kundan Green Energy

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As the founder of an electric vehicle startup, I am incredibly encouraged by the government’s commitment to expand and strengthen the e-vehicle ecosystem. The support for manufacturing and charging infrastructure, along with the encouragement for greater adoption of e-buses for public transport through a payment security mechanism, signals a significant step towards a sustainable and green future. With the growing number of startups in the electric vehicle industry, this commitment will undoubtedly spur our Financial Minister’s vision.We are optimistic about the opportunities that lie ahead and is committed to contributing to the EV revolution in India. The budget speaks volumes – a clear reflection of the concrete effects these initiatives will have on the startup ecosystem in the electric vehicle industry.

Rohit Pandit, Managing Director and Chairman, Shuzlan Energy

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We are optimistic about measures like the concerted focus of the honourable Finance Minister on promoting electric mobility through the announcement of greater adoption of e-buses, which is truly encouraging for the EV industry and will equally support sustainable transportation solutions. However, there are certain areas where we believe the budget could have been more encouraging. For instance, a more robust policy framework for the adoption of electric vehicles (EVs) and announcements on the related infrastructure development would have been more beneficial for the industry. Additionally, greater incentives for EV manufacturing and research and development (R&D) activities would have further accelerated the growth of the EV industry.

Darshan Rana, Chairman and Managing Director, Erisha E Mobility Private Limited

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The focus on leveraging green energy, including the initiative for rooftop solarisation to provide 300 units of free electricity monthly to 1 crore households, not only promises significant savings for the Indian populace but also aligns with the global mandate towards achieving net zero emissions. Integrating it with the carbon credits mechanism, which are under development in the country, this will prove to be feasible for its own funding.

The allocation of a Rs 1 lakh crore corpus for interest-free financing for R&D in sunrise domains – the emerging industries of innovation likely to grow rapidly will prove a milestone in climate action of India. The advancement of electric vehicles (EVs) policies related to infrastructures especially and the development of a green energy infrastructure underscore a pivotal shift towards sustainable economic growth.

The emphasis on coal gasification and liquification, alongside the innovative measures for biomass and compressed biogas, marks a critical step in reducing dependency on imports and fostering energy security. It will reduce the upstream supply chain uncertainties for entrepreneurs working on biofuel manufacturing making this country energy and carbon secured.

Viability gap funding for 1GW offshore wind energy exemplifies India’s commitment to renewable growth and marrying economic development with environmental care.

The government’s investment in the blue economy and bio-manufacturing demonstrates a holistic approach to leveraging India’s natural resources responsibly.

We are excited about the entrepreneurship and employment opportunities these initiatives will generate while aggressively working for the planet and are fully committed to supporting India’s journey towards a sustainable and resilient future.

Manish Dabkara, Chairman and MD EKI Energy Services Ltd and President Carbon Markets Association of India

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“Being an interim budget only, it is still heartwarming to see that “green energy promotion” continues to be a key message of the finance minister in her limited agenda budget speech for 2024. Her reiteration that India is committed to being net zero by 2070 also shows the government’s continuing commitment to all-round promotion and development of renewable energy in India in the coming years.

The extension of “viability gap funding” for harnessing offshore untapped wind energy potential and taking it to 1 GW+ in the initial phase, along with schemes such as the Pradhan Mantri Suryodaya Yojana, set the direction for the government’s final budget proposals for renewable industry post-elections in April 2024.

The commitment to expand and strengthen the EV ecosystem will further boost the growth of renewable green energy demand and help the government meet its target of 500 GW of green energy by 2030. 

With this positive framework in the interim budget, the industry feels confident that the final budget proposals of the government will favourably reconsider and implement its following key long-pending demands:

• Further rationalisation and realignment of the renewable policy framework between the state and central government are needed to tap the large C&I segment.
• Rationalise and reduce import duty and GST on critical inputs (cells, modules, battery storage solutions, green hydrogen equipment, etc.) to further give impetus to green energy growth in the country. 
• Prompting industry to exploit PLI scheme benefits to promote in-house manufacturing of wafers, ingots, and silicon to optimise the solar value chain.
• Larger allocation of priority capital investment in the sector and helping source project finance through international renewable development organisations at very competitive cost.
• Extending income tax benefits to newly incorporated power generation companies for one more year beyond March 31, 2024.”

S.K Gupta, CFO, AmpIn Energy Transition 

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