India’s clean-energy transition received one of its strongest fiscal endorsements yet in the Union Budget 2026–27, with a sharp rise in allocations for the Ministry of New and Renewable Energy (MNRE) signalling a renewed push on scale, manufacturing depth and energy security.
The MNRE’s outlay rises to ₹32,914.67 crore in 2026–27, up from ₹26,549.38 crore in 2025–26—a nearly 24% increase—underscoring the government’s intent to accelerate solar deployment, domestic manufacturing and grid-linked transition pathways.
Finance minister Nirmala Sitharaman framed the Budget as a bridge between ambition and discipline, backing sustained public capital expenditure of ₹12.2 lakh crore while advancing reforms to crowd in private investment. The clean-energy thrust sits squarely within that approach: building long-term productive capacity rather than relying on short-term stimulus.
Solar Program Expansion
MNRE minister Pralhad Joshi said the Budget charts a “strong and forward-looking path” for sustainability, energy security and inclusive growth. A marquee beneficiary is the rooftop solar programme PM Surya Ghar, whose allocation rises to ₹22,000 crore in 2026–27 from ₹20,000 crore last year, reinforcing the government’s push for distributed solar adoption.
Farmer-focused PM-KUSUM continues to receive targeted backing with ₹5,000 crore, up from ₹2,600 crore in 2025, supporting solarisation of pumps and decentralised generation in rural areas.
Manufacturing received a decisive boost through customs-duty measures. The Budget exempts basic customs duty on sodium antimonate, a critical input for solar glass, easing costs and improving raw-material availability for domestic producers.
Capital goods used for processing critical minerals also get customs relief, while targeted exemptions for lithium-ion cells, battery energy storage systems (BESS) and other clean-energy inputs extend policy certainty for scale-up.
Strengthening Investor Confidence
Industry executives said the measures improve project viability and signal a shift from protection to performance. Vineet Mittal, Chairman of Avaada Group, said the Budget balances ambition with fiscal discipline, and that sustained capex alongside reforms like the Infrastructure Risk Guarantee Fund will build durable capacity and investor confidence.
Rahul Munjal of Hero Future Energies highlighted the pivot from “ease” to the “speed of doing business”, noting that customs exemptions for batteries and clean-manufacturing inputs will accelerate domestic capacity, while continued backing for nuclear energy creates a stable framework for capital-intensive investments.
Manufacturers echoed the sentiment. Prashant Mathur, CEO of Saatvik Green Energy Limited, said the near-29% rise in PM Surya Ghar spending locks in long-term demand visibility, enabling multi-GW investments and deeper backward integration.
He added that duty rationalisation and correction of inversions enhance export competitiveness, positioning India as a credible China+1 manufacturing hub.
Beyond renewables, the Budget’s energy architecture is deliberately technology-agnostic.
Alignment with the Carbon Capture, Utilisation and Storage (CCUS) roadmap—supported by a ₹20,000 crore outlay over five years—targets hard-to-abate sectors such as power, cement, steel, refining and chemicals, while long-term customs exemptions for nuclear projects till 2035 offer certainty for baseload expansion.
Taken together, the higher MNRE allocation, targeted scheme funding, manufacturing-friendly duty reliefs and transition technologies mark a coordinated strategy: expand clean capacity at pace, anchor domestic value chains and safeguard energy security—while keeping fiscal discipline intact.