Post-Bud­get re­ac­tions

Power Watch India - - CONTENTS -


Sabysachi Ma­jum­dar, Group Head, ICRA Ltd

The Union bud­get has favourable pro­pos­als for the power sec­tor which in­clude in­creased al­lo­ca­tion to­wards ru­ral elec­tri­fi­ca­tion scheme un­der the Deen Dayal Upad­hyaya Gram Jy­oti Yo­jana (DDUGJY) and mea­sures to aug­ment so­lar project ca­pac­ity ad­di­tion. The progress to­wards 100% ru­ral elec­tri­fi­ca­tion tar­get by May 2018 as an­nounced in the bud­get for pre­vi­ous FY is on track and this cou­pled with higher fund­ing sup­port un­der DDUGJY is likely to grad­u­ally im­prove the en­ergy de­mand and hence, the PLF lev­els for power gen­er­a­tion en­ti­ties to some ex­tent. The de­mand is also likely to be sup­ported by in­creased bud­getary al­lo­ca­tion to­wards in­fra­struc­ture seg­ment (par­tic­u­larly roads, hous­ing and rail­ways) which in turn will lead to an in­crease in en­ergy de­mand from the in­dus­trial sec­tor. While these mea­sures are likely to boost ag­gre­gate de­mand, an in­creas­ing fo­cus on so­lar en­ergy is likely to af­fect the en­ergy de­mand for ther­mal power gen­er­a­tion en­ti­ties to some ex­tent. The bud­get also high­lighted that an amend­ment bill is pro­posed in Ar­bi­tra­tion and Con­cil­i­a­tion Act which will en­able speedy res­o­lu­tion of dis­putes for PPP con­tracts. This is a favourable de­vel­op­ment for power gen­er­a­tion projects, which have been af­fected by un­vi­able tar­iffs quoted in past bids.

Vikram Ag­gar­wal, Man­ag­ing Di­rec­tor, Vir­tu­aal In­fra Power

The Union bud­get 2017 gives a lot of im­pe­tus to ru­ral spend­ing and roads which will in the long term boost up the econ­omy. The re­duc­tion in in­come tax to MSME will ben­e­fit all cor­po­rates across sec­tors. How­ever, the bud­get lacks any ma­jor stim­u­lus for the man­u­fac­tur­ing sec­tor and there are no ma­jor pol­icy re­forms or ben­e­fits. The hy­dro sec­tor has been lan­guish­ing and was ex­pect­ing a boost with pri­or­ity lend­ing, tax hol­i­day. We hope MNRE and as­so­ci­ated min­istries will pick up the man­tle and en­cour­age hy­dropower projects in the coun­try.

VP Ma­hen­dru, CMD, EON Elec­tric

The Union Bud­get 2017-18 has come up with some in­ter­est­ing steps when it comes to the LED light­ing in­dus­try. With ru­ral de­vel­op­ment be­ing one of the ma­jor fo­cuses for 2017-18, there has been an in­creased al­lo­ca­tion for ru­ral elec­tri­fi­ca­tion which will in turn ben­e­fit the man­u­fac­tur­ing and sale of elec­tri­cal ap­pli­ances. It is a bold move by the govern­ment to put a tar­get of 100 per cent elec­tri­fi­ca­tion of vil­lages by May 2018. The pro­vi­sion for 5 per cent tax ex­emp­tion for com­pa­nies whose turnover is less than Rs 50 crore is also com­mend­able. The bud­get should have also tar­geted in­cen­tives and con­ces­sional in­ter­est rates for man­u­fac­tur­ers of LED light­ing prod­ucts and projects keep­ing in mind that LED light­ing can play a big role in en­abling im­ple­men­ta­tion of our govern­ment’s vi­sion of 100 per cent ru­ral elec­tri­fi­ca­tion, and en­ergy con­ser­va­tion. Es­tab­lish­ment of Spe­cial Eco­nomic Zones (SEZs) for the LED light­ing in­dus­try con­tin­ues to be a crit­i­cal pri­or­ity for the in­dus­try.

Su­nil Khanna, Pres­i­dent and MD, Vertiv In­dia

We be­lieve that the govern­ment has fo­cused on cre­at­ing an in­clu­sive bud­get for a trans­par­ently gov­erned coun­try... Per­son­ally be­lieve that this bud­get holds a lot of prom­ise for skilling youth in the coun­try. This is some­thing that var­i­ous in­dus­try bod­ies in­clud­ing the CII, have al­ways ad­vo­cated. The ful­fil­ment of the Bharat Net scheme along with schemes tai­lored for the MSME sec­tor will help con­trib­ute to a vi­able and healthy startup ecosys­tem... Con­sid­er­ing the power deficit sit­u­a­tion in the coun­try, the pro­posal to feed 7000 rail­way sta­tions with so­lar en­ergy will help in re­duc­ing de­pen­dence on con­ven­tional en­ergy sources. The al­most 1/3rd in­crease in re­source al­lo­ca­tion to­wards In­te­grated Power De­vel­op­ment Scheme and Deen Dayal Upad­hyaya Gram Jy­oti Yo­jna (from Rs 7874 crore to Rs 10635 crore) is also a step in the pos­i­tive di­rec­tion.

Ga­gan Ver­mani, CEO and Founder, MYSUN

Trans­form, En­er­gise, Clean In­dia.’ Arun Jait­ley just an­nounced a re­mark­able bud­get with mar­kets re­spond­ing quite pos­i­tively. Purely from a re­new­able en­ergy per­spec­tive, we haven’t seen any ma­jor an­nounce­ments apart from a 20 GW Phase 2 of the So­lar Mis­sion and 7,000 rail­way sta­tions to be cov­ered un­der the So­lar Mis­sion. It is not clear if this 20 GW is in ad­di­tion to the 100 GW so­lar tar­get by 2022 or in­cluded in the same. How­ever, three events can have a ma­jor im­pact on the so­lar sec­tor in­di­rectly. One, there is a huge push on in­fra­struc­ture spend­ing (al­most Rs 4 lakh crore al­lo­cated). Sec­ond, the govern­ment seems com­mit­ted to reignite the real es­tate sec­tor. The tar­get to build 1 crore new homes should man­date us­age of a 1 kW so­lar sys­tem per home as each of these homes will need power. That it­self will add 10 GW rooftop so­lar. Third, the en­hance­ment of the carry for­ward du­ra­tion of MAT from 10 years to 15 years and the ra­tio­nal­i­sa­tion of cor­po­rate tax for com­pa­nies with a turnover less than Rs 50 crore would lead to in­creased prof­its for a lot of small sized so­lar in­stall­ers, which could po­ten­tially lead to pass­ing on of the ben­e­fit to end users, re­duc­ing so­lar sys­tem prices. The FM also talks about achiev­ing 100% vil­lage elec­tri­fi­ca­tion by May 2018, and a lot of it could be achieved from so­lar mini grids and other small so­lar in­stal­la­tions. Apart from this, there isn’t much for the re­new­able in­dus­try to cheer about. We would have loved to see the Fi­nance Min­is­ter slightly tweak his bud­get agenda as ‘Trans­form In­dia with Clean En­ergy’.

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