Indian Finance Minister Nirmala Sitharaman’s Budget 2019 demonstrates that it is a good budget for the Renewables and Electric Vehicles sector. Particularly considering how GST has taken out a huge part of the enthusiasm from the budget by making indirect taxes immaterial.
Finance Minister did spured small surprise in the form of the Rs 1 additional special excise duty on fossil fuels. That evidently specifies a government that is strongminded to get the people used to comparatively high pump prices, regardless of any drop in crude oil prices.
The major astonishment, of course, is the Rs 1.5 lacs income tax exemption on interest payment for loans on Electric Vehicles. That, along with the shift of EV’s to the 5% GST slab from 12% right now, is a thoughtful show of support and resolved by the government for people who have been skeptical about their ability to push back against the pressure from legacy auto firms. The affordability factor of EV’s has just been taken to a level even the most enthusiastic supporters did not deliberate possible until later next year.
The customs duty exemption on select parts imports, besides the investment benefits being spoken about for large manufacturing moves in solar equipment and lithium batteries, is also encouraging.
The wider push to increase the taxable income slab to Rs 5 lacs and above, or make life with GST simpler, is also welcome. The expansion of businesses up to Rs 400 crores turnover for coverage under the lower 25% corporate tax rate also covers most of the firms in these sectors.
Unrelated moves like permitting a single woman member of a Self Help Group, or SHG, access to a loan of up to Rs 1 lac under the MUDRA Yojna, could open up potentials for distributed solar firms and devices. GOGLA should be looking at how to use this.
There has been much that has been left unspoken but the thrust of the budget points to the exploration for greater private sector participation in both renewables and EVs. Maybe one reason why bumbling PSU giants like NTPC and PowerGrid have not progressed so well after the speech on the bourses.
Lastly, the complete thrust of the budget, on fixing India’s groaning financial sector, be it PSU banks, NBFC’s, or the bond market makes it clear that the government is thriving to the funding challenge for every player in the economy today. That in itself is positive, and should give everyone hope that the government has certainly got a handle on the problems it needs to resolve.
Sunil Rathi, Director, Waaree Energies says, "While we appreciate the Government’s focus on environmental reforms, it is imperative to focus on the solar segment as a key contributor for clean energy, which is missing from the Union Budget 2019-20. With the economic viability of the solar power coupled with the fact that conventional energy sources now have to match solar parity, it would have been heartening to see more focus on the solar segment to promote ecological stability. The infusion of INR 70,000 crores in the PSBs to stabilize the economy will in-turn benefit the NBFCs, which, in the absence of a recognized banking unit to support small – mid scale solar financing, will provide an impetus to the solar project financing. However, the invitation to foreign PV manufactures to set-shop in India, without prior stabilisation of the domestic manufacturing market, is premature and may prove to be counterproductive for the demand in the sector, which will render the NBFC financial support redundant."
Rajendra Kumar Parakh, Chief Financial Officer, Vikram Solar, “I would like to congratulate Hon'ble FM, Smt Nirmala Seetharaman for presenting her maiden budget. The industry was expecting a policy direction from the government to promote the manufacturing through Make In India program, especially in the renewable energy sector.Government announcement to launch a scheme aimed at encouraging global companies (through competitive bidding process) to set up mega-manufacturing plants in sunrise and advanced technology sectors appears to be a step forward in that direction.
We welcome this move as it will boost the Make in India programme. Having said that, setting up mega manufacturing plants of solar photovoltaic cells and modules require a larger support structure in the form of soft loans, export credits in order to compete globally etc.”
Sanjay Aggarwal, Managing Director, Fortum India says, “The Union Budget presented by the Hon’ble Minister Nirmala Sitharaman today clearly demonstrates the government’s vision of putting India on a growth trajectory. Fortum India appreciates the various steps taken by the government in addressing the issues related to tax and duties in the renewable sector and electric mobility.
As Fortum India proceeds in setting up fast-charging EV infrastructure in India, the reduction in GST and import duties will accelerate the deployment and usage of electric vehicles in India. We now see a lot of action in the electric mobility, charging and storage space in line with the government’s green vision, which is very encouraging for the industry.
We at Fortum wish to collaboratively work with vigour towards government’s aim of having 30% electric vehicles by 2030, by continuing our investments in recycling the capital.”
Ranganath N. K, Area Managing Director, INDO Region, Grundfos says, “We welcome this year’s progressive Union Budget for its focus on addressing the most burning issue that the country is battling – water crisis. The budget empowers the Jal Shakti Ministry to make positive strides towards water conservation by encouraging rainwater harvesting, restoration of water bodies, reuse of water, watershed development and afforestation. It is noteworthy that the Ministry will work with State and Central governments to alleviate water stress in 1,592 blocks across 256 districts. This undeterred focus on water will enable the government to achieve its vision of bringing piped water to every house by 2024.”
Dr Rahul Walawalkar, President, IESA says, "We are excited with the clear focus that Indian Government has brought to the growing field of energy storage and EVs through range of incentives in the budget 2019-20. These incentives can help us achieve the goal of making India a global hub for R&D and manufacturing of advanced energy storage and EVs by 2022."
Akshay Singhal, Founder, Log 9 materials, working in Nanotechnology Domain says “Income tax deduction on loans for EV purchase is an extremely welcome move by the new Finance Ministry. EVs are pricier than usual vehicles as initial cost, hence this will boost adoption. Relief from angel tax is also a big thumb up and relief for startups. However, better structuring is required for deployment of Fund of Funds to ensure benefit to high technology intensive startups which fall in the category of high risk, high reward. This is important for development indigenous core technologies like battery manufacturing, fuel cell manufacturing, etc.”
Shailesh Chandra, President – Electric Mobility Business and Corporate Strategy, Tata Motors Ltd says "The incentives announced today by the Finance Minister, in terms of, additional interventions and steps to support the EV adoption, reinforces a strong commitment by the government to steer electrification on a faster trajectory. The proposal to lower the GST rate for EVs to 5% and reduction in duties of EV components, which we are studying, is a welcome step. It will help in further narrowing down the cost of ownership gap against ICE vehicles. Additionally, private buyers, who were earlier not considered for a subsidy through FAME 2, will now have a reason to seriously consider an EV with the tax exemption of up to Rs. 1.5 lacs.
Tata Motors has been proactively participating in EV ecosystem creation, aligned to government’s vision of achieving a high EV penetration by 2030. Today’s announcement further emboldens our resolve and we will further accelerate our efforts.”
Anil Chaudhry, Zone President & MD, Schneider Electric-India says, “We are glad to see the direction given by the government by outlining the key areas as a part of the broader vision for the future – with Energy for All at its very core. It is a well balanced budget with a clear push towards the socio-economic growth and development of the country. The focus given to provide Access to Energy to each and every household in the rural and urban areas is very progressive.
There is a visible push for new age technologies and digital solutions as the budget specifically mentioned the importance given to Artificial Intelligence, Internet of Things, Big Data and Digital India – which are an integral part of the long term vision. With an eye to boost up the economic growth and Make in India, the proposal to launch a scheme to invite global companies to set up mega-manufacturing plants is laudable. All in all, it is encouraging to see the Government’s continued focus on the programs- UJALA, Saubhagya and UDAY Yojana as key initiatives to the nation’s economic growth, with an even greater focus on digitisation to boost the rural economy”
Anil Gupta, CMD, KEI Industries Ltd says, ‘We would appreciate development centric forward looking budget, which will impact every household of the country and industry will witness new horizon of development. The maiden Budget has laid special emphasis on the much awaited infrastructural development where the Government will invest Rs 100 Lakh crores in this segment for the next five years. The power sector has seen phenomenal growth achieving the electrification of almost 96% of households in the last 5 years. This large growth in the sector can be attributed to the infrastructure boom in India creating more avenues for companies like ours. Investments in railways, housing and farm are paramount to overall infra-growth for our company. The Government is also planning to invest 50 Lakh crores for Railways which will further boost the demand resulting in expansion of our business. Furthermore, the Government has shed light on the plan of One nation, One Grid & the Pradhan Mantri Gram Sadak Yojna will be a standalone element in ensuring power connectivity at affordable rates.’
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