By Gautam Mohanka
For India to meet its ambitious goal of achieving net zero carbon emission by 2070, there is a pressing need to focus on green growth driven by a sustainable economy. The Finance Minister kept the issue on priority while presenting the Union Budget 2023 at the Parliament on 1 February 2023. Especially in recent years, climate action and sustainability have been the most discussed topics not only in India but across several global platforms in various countries. Even many national leaders like the Minister of Petroleum and Natural Gas have multiple times highlighted the country’s renewable plans like manufacturing and exporting green hydrogen or exploring sustainable aviation fuel for aircrafts.
This year, the Finance Minister drafted the Union Budget based on seven guiding lights or “Saptarishi”, in which green energy was a major part. To facilitate a steady transition of the Indian economy to one powered by green energy, the government announced a slew of schemes and initiatives that will catapult the country’s green revolution by promoting sustainable living. The Finance Minister has announced a budgetary allocation of Rs 10,222 crore to the Ministry of New and Renewable Energy (MNRE), which is a 45 per cent hike from the Rs 7,033 crore expected to be spent this fiscal year.
The primary expectation of the renewable energy players from Budget 2023 was more investment in the sector to help the country decrease the share of fossil fuels and increase the share of renewable energy. Addressing the concerns effectively, the government has earmarked ₹35,000 crores for “priority capital investment”. The move by the government is a major boost towards achieving energy transition, net zero objective and energy security.
The Finance Minister also highlighted the National Green Hydrogen Mission with an outlay of ₹19,000 crores to help achieve an annual production target of 5 MMT by 2030 for facilitating the net-zero target. Giving a further push to green hydrogen and to bolster the overall renewable energy projects, the government has announced that battery energy storage systems with a capacity of 4,000 megawatt hours will be “supported” with viability gap funding to encourage investment. Also, the government extending exemption on machines for production of Li-Ion battery manufacturing will significantly increase India’s domestic production capacity.
The government launched the Green Credit Program under the Environment (Protection) Act to incentivize sustainable actions, which is a net positive for the renewable energy industry. The program will incentivize environmentally sustainable and responsive actions by companies, individuals and local bodies and will gradually lead to the mobilization of additional resources for renewable energy projects. However, the most effective utilization of the green credit program will require the involvement of multiple ministries and several existing schemes that incentivize emission reductions by industries.
The budget allocated for the solar power sector this year is Rs 5,331.5 crore, which is a 53.65 per cent increase as compared to the last year’s allocation of Rs 3,365 crore and a 104.58 per cent increase from FY 21 allocation of Rs 2,606 crore. Another major hike was for the off-grid solar projects, in which the government was expected to allocate an expenditure of Rs 61 crore, and instead, the Ministry budgeted Rs 360 crore for the coming financial year.
Furthermore, there has been a budget allocation of Rs 54 crore for the National Institute of Solar Energy, Rs 9 crore more than the previous year’s budget. The interesting numbers indicate the magnitude of the government’s renewed focus to accelerate the energy transition in the country and meet its net-zero targets. This is also a major encouragement for the domestic players, which will eventually help India achieve its ambitious goal of becoming self-reliant.
(By Gautam Mohanka Managing Director, Gautam Solar. The views expressed do not represent the opinion or policy of FinancialExpress.com and are that of the author.)