We are glad that Hon’ble finance minister, Smt.Nirmala Sitharaman’s Union Budget for FY 21-22 focused on empowering the country to move forward in changing strategic and geopolitic landscapes with significant and accelerated reforms. We are certain that the new budget will help India to prepare itself for the ‘New World Order’, significantly enhance infrastructure development and job-creation.
The focus on job-creation and economic recovery is evidenced in the increase in healthcare and infrastructure spending to spur growth. Further, the government’s intent to support double digit yearly growth in manufacturing, 137% growth in health and wellness investment, additional outlay for the PLI scheme, investments in road and transport solutions, development in farming, animal husbandry and fisheries, INR 50,000 crore investment in R&D, and INR 3.5 lakh crore investment in power sector are noteworthy.
Indian Renewable energy industry and especially Solar sector is appreciative of Government of India’s initiatives to support green energy throughout the decade and especially during the pandemic.
Although the initiatives, especially the Aatmanirbhar campaign and RBI’s support in restarting the nation and the industries has added nearly 2.1 lakh crore to aid in growth, the solar industry was looking forward for a significant boost to strengthen the ecosystem for domestic solar manufacturing. It is the key enabler to lead the country towards sustainable growth.
The Government of India has acknowledged that solar energy and renewable sector overall has huge promise for India. The Union Budget has announced 3.5 lakh crore of new investment to the power sector, INR 1000 crore investment to Solar Energy Corporation, INR 1,500 crores to Indian Renewable Energy Development Agency which will certainly give further impetus to renewable energy growth. We eagerly await the detailed plan on the phased manufacturing plan for solar cells and solar panels, announced by the Finance Minister to scale-up domestic capacity. Additionally, we believe, raising duty on solar invertors from 5% to 20% and on solar lanterns from 5% to 15% to encourage domestic production will create demand and bring in revenue for further progress. The announcement of the comprehensive Hydrogen Energy mission 2022 is a welcome move to enable India’s transition to a low-carbon economy.
However, the RE industry and especially the solar industry was hoping for more elaborate support from the union budget on implementation of the Basic Customs Duty (BCD) with exemption for SEZ based manufacturers, 5% Interest Subvention on term loan and working capital, upfront Central Financial Assistance of 30% on CAPEX, increase export incentive from 2% to 8% under Remission of Duties or Taxes on Export Product (RoDTEP), super deduction for R&D expenses, more access to National clean energy fund etc.
As a domestic solar manufacturer, we are appreciative of the Government’s focus towards supporting solar manufacturing growth in India and hope the new phased manufacturing plan for solar cells and solar panels to embody the intent.