The Minister of State ( I/C) for Power, Coal & New & Renewable energy , Mr. Piyush Goyal , applauding the Union Budget 2014-15 said that “This is a transformative budget focusing on policy initiatives and a heavy emphasis has been laid on investment-led growth, which is reminiscent of the Vajpayee-era. The budget addresses immediate concerns of all sections of society – young, old, poor, women, farmers, SCs/STs, backward sections of the society, middle-class, entrepreneurs etc.” While Congratulating the Union Finance Minister Mr.Arun Jaitley for for delivering this growth-oriented, pragmatic budget , Mr.Goyal said that “ This will truly be an inflection point for India. The FM has taken several strong steps for the revival, rejuvenation and resurgence of the Indian economy and presented a tangible and actionable roadmap to lift crores of people out of poverty, within 5 years. The thrust on skill development, manufacturing, education, clean & renewable energy, infrastructure and healthcare, are particularly heartening to see. Mr. Goyal said that the Finance Minister has reinstated our government’s commitment of 24 x7 power to all homes.
Welcoming the proposals relating to ministries of Power, Coal and New & Renewable Energy Mr. Goyal said, “I am elated at the announcements to encourage new and renewable energy (solar, wind) and development of transmission & distribution. This will go a long way in ensuring 24x7 power to all. Welcome standardization of custom duty on coal – across grades and types – to end disputes immediately. This is the kind of practical solutions one expects from Mr. Arun. Our moves for improving coal quality by supplying crushed and washed coal, ensuring adequate coal supply for already commissioned & would-be commissioned power plants will unlock dead investments. Also welcome steps for incentivizing solar powered water pumps, and setting up of solar parks Rajasthan, Tamil Nadu and Ladakh; and moves for setting up solar plants on banks of canals. We will also set up Green Energy Corridors for evacuation of renewableenergy.”
Mr.Goyal said that “I completely endorse the Union Budget 2014-15 as a visionary step towards fulfilling the aspirations of all Indians: “Sabka Saath Sabka Vikas”!”
Following are the excerpts of the Finance Minister’s Budget Speech relating to the Power, Coal and New Renewable Energy Sectors.
I) Power Sector:
II) Coal Sector:
Coal (Para 117)
Coal Bed Methane (Para 119):
III) Indirect Taxes (Rationalisation Para 221):
At present, coal attracts customs duties at different rates. It is proposed to rationalize the duty structure on all non-agglomerated coal at 2.5 percent basic customs duty and 2 percent CVD. Anthracite coal, bituminous coal, coking coal, steam coal and other coal will attract the same duty. This will eliminate assessment disputes, transaction costs associated with testing.
IV) Clean energy Cess (Para 237):
V) Mining (Para 122):
VI) Revision of Royalty Rate (Para 123):
VII) Power (Para 116):
To promote cleaner and more efficient thermal power it has been proposed to allocate an initial sum of Rs 100 crore for preparatory work for a new scheme “Ultra-Modern Super Critical Coal Based Thermal Power Technology.”
(Para 200) Supply of power continues to be a major area of concern for the country. Therefore, instead of annual extensions, I propose to extend the 10 year tax holiday to the undertakings which begin generation, distribution and transmission of power by 31.03.2017. This stability in our policy will help the investors to plan their investments better.
VIII) MNRE :
In reaction to the budget, the industry shared their level of satisfaction.
Mr. Anil Chaudhry, Country President and Managing Director, Schneider Electric India expressed that, "The budget has adequately focused on energy, in sync with the new Government’s vision, and announced various measures that will benefit in ensuring sustained growth for the sectors. The reeling power sector will find some respite, if the measures announced in the budget are implemented properly. There are measures accounted to strengthen the entire power value chain. From Rs 100 crore allocation for super critical ultra modern thermal power to the rationalization of coal linkages will facilitate the struggling power producers and put the stranded power plants on a rebound course. The Government’s promise to resolve the existing deadlocks in coal sector and provide fuel to all projects coming up before March 2015 will be a massive thrust to get the flailing sector on course to meet the Government’s 12th Plan target of 88,000 MW.
Mr. Tulsi Tanti CMD Suzlon comments that the budget promotes manufacturing led growth, infrastructure and clean energy. According to him this is a growth oriented and futuristic budget and the big shift in policy initiatives will revive and promote manufacturing thereby paving the way for 7% growth. Key announcements on investments in physical infrastructure development, direct allowances for new investment in Plant & Machinery, FDI, GST implementation and long term financing options are likely to boost manufacturing.
He also lays emphasis on the fact that Wind Energy (clean) has been given a top priority, where:
Mr. Vineet Mittal, Founder President Solar Power Developers ASSOCIATION (SPDA) belives that the overall sentiment in the industry post the budget is very positive; it is a very business-friendly budget.
He further commented that, "We would like to congratulate the Finance Minster on putting together the vision of the new government on the critical sectors of the economy. Our complements for the great road map drawn up for the Renewable Energy industry as a whole and the special thrust for broad basing and up scaling the Solar power sector nationally.
To start with the proposed UMPPs in Rajasthan, Gujarat, Tamil Nadu and Ladakh in J&K with a budget of 500 crores is very encouraging. If the govt ensures issues of evacuation, land and availability of the water is taken care of – there will be a lot of players willing to enter this segment. Another positive move is the govt relaxing requirements of CRR, SLR, priority sector lending, because of this banks are now being able to issue long term bonds as loans for projects as long as 25-30 years!
There is good news for the manufacturers as well especially with regards to concession of duty. A concessional basic customs duty of 5 percent is also being extended to machinery and equipment required for setting up of a project for solar energy production. This will give a shot in the arm for the local manufacturers.
Even the issue on supply of power which was a major area of concern has been addressed – now instead of annual extensions – it has been extended by 3 years. This will give predictability to the tax implications. This stability in our policy will help the investors to plan their investments better.
An additional budget of Rs. 100 crores has also been set aside for the development of 1MW Solar parks on the banks of canals. Implementation of the green energy corridor project will be accelerated in this financial year to facilitate evacuation of renewable energy across the country. Overall it is a step in the right direction."
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