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This Budget has highlighted the importance of solar sector with quite a few mentions in the Finance Minister’s speech.
Though there was no new announcement relating to the solar power sector, the fact that Jaitley reiterated that 7,000 railway stations would be energised with solar power “in the medium term” is noteworthy.
He also observed that work on this has started in 300 stations and another 2,000 stations will be taken up soon.
Again, in a speech that spoke nothing of the power sector in general, the fact that the second phase of Solar Park development for additional 20,000 MW was mentioned underscores that the sector is very much on the government’s radar.
S Chandrasekhar of Boruka Power, a renewable energy company, said that the reduction in corporate tax for companies up to a turnover of ₹50 crore would benefit small renewable energy producers — independent power producers with capacity under 60-70 MW.
Sunil Jain, Executive Director and CEO of Hero Future Energies, another wind and solar energy company, observed that the proposal to extend the concessional withholding rate of tax of 5 per cent on interest earned by foreign entities in external commercial borrowings or in bonds and government securities – till June 2020 – is significant for the renewable energy industry.
ECB and bond financing is common in this industry.
Also, hidden in the annexures is the abolition of the 5 per cent basic customs duty on imported tempered glass used in the manufacture of solar panels.
This could make domestic modules a wee cheaper.
On the overall, it is also noteworthy that the allocation to the Ministry of New and Renewable Energy has been hiked to ₹5,473 crore, from ₹5,036 crore in last year’s budget estimates and ₹4,360 crore to revised estimates of last year.
The higher allocation could be of some help because the Ministry has not paid the generation-based incentive dues to eligible wind power generators for over six months now.
“The Ministry just does not have money,” observed one industry insider.
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