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Energetica India Industry Speaks on India’s Budget 2016-17 Energetica India takes an opinion on the budget and its impact on India’s renewable energy industry. ENERGETICA INDIA: How will the change in accelerated depreciation impact investments in the renewable energy industry? Mr. Tulsi Tanti: • Accelerated Depreciation helps companies hedge their energy costs on a long term basis because they can invest and then draw electricity for their captive utilization. • The reinstatement of Accelerated Depreciation last year provided stimulus for the revival of investments in renewable energy from Corporate, PSUs and SME sector to set up captive power plants and hedge their power cost for 25 years. • Two years ago, the total annual installation was around 1,800MW, a result of the lack of Accelerated Depreciation. This went up to 2,300MW in the last financial year and by the end of this financial year, we will probably reach 2,800MW. One of the reasons for this rise is the reinstatement of Accelerated Depreciation. • The Union Budget has now proposed a reduction in Accelerated Depreciation limit from 80% to 40% effective 1st April, 2017. There is still time for this to take effect. Until then; the sector continues to look as attractive as before. I believe it will continue to attract investments as before. • However, I strongly recommend that the Accelerated Depreciation reduction be reviewed. We wish to reiterate that the Accelerated Depreciation limit of 80% should continue till 2022, aligned to the government target of 175GW renewables by 2022 and to boost manufacturing under the Make in India vision. Mr. Ramesh Kymal: With respect to renewable energy sector, this budget would have a long term impact on the growth; Increase in Clean Energy Cess from INR 200 to 400 is welcome move and we hope the Government will actively deploy these funds to facilitate growth of renewables across India. However, the Government has set sunset clause on Tax Holidays under Sec80IA (Mar 2017) & also reduced the Accelerated Depreciation from 80% to 40% from the same date. Mr. C M Venugopalan: We do not anticipate the reduction in Accelerated Depreciation AD benefit to be a major setback for the solar industry. First of all, out of the total installed capacity, very few companies/investors have claimed AD benefits in the sector. Mr. Tulsi Tanti Chairman, Suzlon Group Mr. Ramesh Kymal Chairman and Managing Director, Gamesa India Mr. C M Venugopalan Head, Bosch Energy Division RENEWABLE ENERGY 36 energética INDIA · MAR | APR16


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