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Budget proposes Rs 220 billion for power and renewable energy sector in 2020-21
POWER & RENEWABLE ENERGY

Budget proposes Rs 220 billion for power and renewable energy sector in 2020-21

The Union Budget 2020 proposes Rs 220 billion for power and renewable energy sector in 2020-21. Also, expansion of national gas grid from the present 16,200 km to 27,000 km has been proposed. Further, reforms have been announced to facilitate transparent price discovery and ease of transactions.

Sharing his outlook on Budget 2020, Sabyasachi Majumdar, Senior Vice President & Group Head, Corporate Ratings, ICRA, says, “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. 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.”  

Rajiv Srivastava, Managing Director & CEO, Indian Energy Exchange (IEX), shares his views on the announcements around the energy sector and how it will impact the industry. He says, “IEX welcomes the government’s move to expand the natural gas pipeline grid and introduce reforms for transparent price discovery of natural gas. The emphatic focus on gas and renewable energy in Budget 2020 will enable shift towards cleaner energy and, also deliver on our commitments under the Paris Climate Agreement.” He adds, “At IEX, our priorities are aligned with the government. A few initiatives we plan to launch soon such as India's first gas exchange, a green energy market, real time market in electricity and longer duration contracts will enable us to further the government's energy agenda outlined in this budget.”

Vimal Kejriwal, Managing Director & CEO, KEC International, says, “Union Budget 2020’s infra focus is expected to provide a significant fillip to KEC. Allocation towards power and renewable energy and transport infrastructure, upgradation of stations and developing solar in railways, setting up of 100 new airports, five new Smart cities and linking 1 lakh gram panchayats with BharatNet augurs well for our businesses.”

Sumant Sinha, Chairman & Managing Director, ReNew Power, says, “The Union Budget 2020 is a balanced and pragmatic statement of intent. Finance minister in her speech has attempted to address the trust deficit across a host of sectors. She has assured stock market investors by abolishing dividend distribution tax, addressed concerns of start-ups with respect to ESOPS and in the renewable energy sector through strengthening of contracts act and lowering of Corporate tax rate for new energy companies. While there was pressure to move away from fiscal responsibility the government has chosen to walk a middle path allowing for an acceptable increase in fiscal deficit while putting some extra money in the hands of tax payers.”   


The Union Budget 2020 proposes Rs 220 billion for power and renewable energy sector in 2020-21. Also, expansion of national gas grid from the present 16,200 km to 27,000 km has been proposed. Further, reforms have been announced to facilitate transparent price discovery and ease of transactions.Sharing his outlook on Budget 2020, Sabyasachi Majumdar, Senior Vice President & Group Head, Corporate Ratings, ICRA, says, “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. 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.”   Rajiv Srivastava, Managing Director & CEO, Indian Energy Exchange (IEX), shares his views on the announcements around the energy sector and how it will impact the industry. He says, “IEX welcomes the government’s move to expand the natural gas pipeline grid and introduce reforms for transparent price discovery of natural gas. The emphatic focus on gas and renewable energy in Budget 2020 will enable shift towards cleaner energy and, also deliver on our commitments under the Paris Climate Agreement.” He adds, “At IEX, our priorities are aligned with the government. A few initiatives we plan to launch soon such as India's first gas exchange, a green energy market, real time market in electricity and longer duration contracts will enable us to further the government's energy agenda outlined in this budget.” Vimal Kejriwal, Managing Director & CEO, KEC International, says, “Union Budget 2020’s infra focus is expected to provide a significant fillip to KEC. Allocation towards power and renewable energy and transport infrastructure, upgradation of stations and developing solar in railways, setting up of 100 new airports, five new Smart cities and linking 1 lakh gram panchayats with BharatNet augurs well for our businesses.” Sumant Sinha, Chairman & Managing Director, ReNew Power, says, “The Union Budget 2020 is a balanced and pragmatic statement of intent. Finance minister in her speech has attempted to address the trust deficit across a host of sectors. She has assured stock market investors by abolishing dividend distribution tax, addressed concerns of start-ups with respect to ESOPS and in the renewable energy sector through strengthening of contracts act and lowering of Corporate tax rate for new energy companies. While there was pressure to move away from fiscal responsibility the government has chosen to walk a middle path allowing for an acceptable increase in fiscal deficit while putting some extra money in the hands of tax payers.”   

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