The Union Budget 2016 put forth by Hon'ble Finance Minister Arun Jaitley is positive and growth oriented, with a view to uplift rural development.
The budget focuses on bringing about agricultural and farmer welfare, development in manufacturing as well as rural, infrastructure and social sector development, among others. Some of the benefits of this focus include increased employment, boost to entrepreneurship, a better healthcare system and increased ease of doing business, all of which are pivotal to the growth of the economy.
I congratulate the Finance Minister for taking definitive steps to address concerns of the global slowdown. Spurring rural development, focus on job creation and increasing consumer demand and exports are steps in the right direction for the Indian economy.The budget also reiterates the mission and vision of the government to achieve long term self-sufficiency and sustainability, create the necessary support infrastructure and enhance the nation's literacy rate.
Union Budget 2016: Impact on the renewable energy sector
The government plan to provide 100% rural electrification by 1st May, 2018, as part of its rural development programme, is a big boost to the renewable energy sector and rural economy. At the same time, coal cess has been doubled to Rs. 400/tonne, thereby creating the resources to achieve the 30% - 35% carbon emission reduction target outlined by India at COP21 this year, as well as the target of 175GW renewables by 2022. Further, government commitment to improve grid infrastructure is reflected in the proposed additional depreciation for the plant and machinery acquired and installed for transmission activity.
The excise duty reduction from 12.5% to 6% on materials used for parts and sub-parts of rotor blades for wind operated electricity generators is a positive move. However, the government should review the increase in excite duty of unsaturated Polyester Resin (polyester based infusion resin and hand layup resin), Hardeners/Hardener for adhesive resin, Vinyl Easter Adhesive (VEA) and Epoxy Resin used for manufacture of rotor blades. Also, the imposition of service tax on freight charges incurred for transport of goods by sea will adversely impact the competitiveness of wind turbine manufacturing in India and hence, should also be reviewed by the Finance Minister.
I hope the government will reconsider the Accelerated Depreciation (AD) limit which has been reduced from 80% to 40%, effective FY18. I wish to reiterate that the Accelerated Depreciation limit of 80% should continue till 2022, aligned with the government target of 175GW renewables by 2022, and to boost manufacturing under the Make in India vision.
During his speech, the Finance Minister has clearly mentioned the need to diversify the sources of power generation for long term stability. Added to the targets set, the policy framework in place and the outlook on renewable energy, this strengthens our commitment to powering a greener tomorrow.
In conclusion, I would like to reiterate the words of Finance Minister Arun Jaitley, a quote that mirrors my own belief - India remains the bright spot in the gloom of the global economy crisis, and we will turn difficulties into opportunities.