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Budget 2020: Abolition of dividend distribution tax, lower tax rates to encourage fresh investments in power sector, says ICRA

V Rishi Kumar Hyderabad | Updated on February 01, 2020 Published on February 01, 2020

Measures to boost decentralised solar generation, including through solar pumps is likely to lower subsidy dependence for discoms and also provide demand boost to solar equipment and energy efficient pumps manufacturers.

According to Sabyasachi Majumdar, Senior Vice-President and Group Head, Corporate Ratings, ICRA, the proposal to boost coverage of prepaid smart meters over the next three-year period is expected to aid discoms in curtailing distribution losses; benefit consumers by providing flexibility to choose suppliers and rates; and provide demand boost to smart meter manufacturers. Shutting down of old thermal power plants will shift generation to newer generation thermal projects and thus provide a moderate boost to their PLFs.

Abolition of dividend distribution tax and lower tax rates will encourage fresh investments in the power sector, especially renewable energy and transmission sectors. 

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Published on February 01, 2020
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