<div>The Union Budget 2015-16 provides clarity and direction to the ambitious renewable energy targets being announced by the Narendra Modi government, since it took charge in May 2014.<br /><br />Today, Arun Jaitley, union Finance Minister reiterated the intention to target 175,000 MW of Renewable Energy capacity by 2022 - 100000 MW solar, 60000 MW wind, 10000 MW biomass and 5000 MW small-hydro. The economic survey on February 27 suggested the country’s renewable energy industry is likely to generate business opportunities worth $160 billion over the next five years so the nascent sector is looking at a revival after two years of slump. With the BJP government’s push for economic growth, it is largely widely believed that the Prime Minister Narendra Modi is banking on renewable energy to fight climate change and off-set the carbon emissions rather than committing to emission reduction.<br /><br /><img width="640" vspace="1" hspace="1" height="65" align="middle" alt="" src="/image/image_gallery?uuid=1875091a-0860-44d7-8c67-b38cd99c9d77&groupId=36166&t=1425126525287" /><br /> </div><div>However, concerns remain and analysts like Debasish Mishra, Senior Director, Deloitte believe, “To make these RE investments more attractive, a series of measures on excise duty front is announced by FM that will help wind and solar sectors.” Some initiatives have been announced in the budget like reduction of customs duty Active Energy Controller (AEC) for use in the manufacture of Renewable Power System (RPS) Inverters to 5 per cent, subject to certification by MNRE and for evacuated tubes with three layers of solar selective coating for use in the manufacture of solar water heater and system to Nil. <br /><br />Similarly, some renewable energy specific commodities have also been given excise duty relief through restructuring like solar water heater and system from 12 per cent to Nil without CENVAT (Central Value Added Tax) credit or 12.5 per cent with CENVAT credit. Round copper wire and tin alloys for use in the manufacture of Solar PV ribbon for manufacture of solar PV cells to Nil subject to certification by Department of Electronics and Information Technology (DeitY). Pig iron SG grade and Ferro-silicon-magnesium for use in the manufacture of cast components of wind operated electricity generators to Nil, subject to certification by Ministry of New and Renewable Energy.<br /><br />Estimates place 280 million people living without power in India and renewable energy has come to be the most pragmatic option for these people. However, Renewable Energy projects subsidised by the centre or state authorities have got mired procurement controversies and other non payment issues. Therefore in an attempt to address some of these FM today in the budget included “need for procurement law to contain malfeasance in public procurement and a proposal to introduce a Public Contracts (resolution of disputes) Bill to streamline the institutional arrangements for resolution of such disputes. This bill will help bring cogency to other infrastructure projects as well – mostly to be developed under the PPP models.<br /><br />Additionally the industry experts believe proposals such as the creation of a national infrastructure investment fund and doubling of coal cess will help in solving some of the financial challenges being faced by the market players. Currently India is only at 33000 MW and to achieve 175000 MW the Indian RE market is ripe for investment and promising to grow by leaps and bounds year on year. <br /><br />Cautioning against euphoria, Tobias Engelmeier Founder & Director, BRIDGE TO INDIA – a German company established to help promote renewable energy in India – says, “If India is serious about building a 100 GW (or even a 10 GW) market, it needs to offer solid returns from solar projects. Everything else follows. A “strategic” rationale for investing into the solar industry has some merit, but cannot sustain the market.” <br /><br /><br /><br /> </div>
