Budget 2019

‘Doubling of clean energy cess on coal disappointing’

Our Bureau Pune | Updated on January 20, 2018 Published on February 29, 2016

M S Unnikrishnan, Managing Director, Thermax Ltd: Overall, it is a balanced budget. The Finance Minister's decision to contain the fiscal deficit at 3.9 per cent in the current year and stick to the earlier commitment to keep it at 3.5 per cent for FY 2017, is welcome.

The doubling of the clean energy cess on coal is disappointing as the hike would amount to about 6 per cent additional burden on fuel cost. The gencos will pass it on to already stressed discoms that will not be able to share it with consumers as power prices are regulated by the Government. This proposal could adversely affect the balance sheets of discoms.

The allocation for rural development is important as the countryside is reeling in the wake of two successive monsoon failures. The revival of agriculture and rural development are essential for the health of the overall economy.

Infrastructure gets a push in the Budget with a Rs 2,21,000-crore allocation for roads, railways and other infra-related projects. This can help kickstart the investment cycle, persuading the private sector to join.

The promise to bring a new bill on dispute resolution for PPPs will help in reactivating some stranded projects and will encourage similar projects to take off.

Though the amount of Rs 25,000 crore may not be adequate, the FM's statement about re-capitalisation of PSU banks reflects the government's resolve to stand by the banking sector. This is certainly reassuring.

Published on February 29, 2016
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