BLOGS
India’s Annual Budget Attempts to Move towards Green Energy but Falls Short on Specifics

While India’s much awaited annual budget announced by finance minister Nirmala Sitharaman leaned towards intentions to move towards a green economic, unfortunately it fell tragically short on specifics.

The finance minister emphasised an incentive scheme for approximately two million farmers to move to solar-powered irrigation pumps from diesel and grid-supplied electricity, but said nothing about improving its effect on critically short groundwater reserves. Around 30 million traditional pumps are in use for irrigation now.

The scheme involves about 1.5 million farmers utilizing solar panels on fallow land and selling electricity back to the utilities. However, there is no mention of a metre that can track a two way flow of energy, which is a must for such sales. The finance minister also said coal-fired power plants that failed to put in pollution control equipment would be asked to shut down, but did not put it in the form of either a rule or a directive – it is merely an advisory to power producers, who are repeatedly going to court and saying they cannot afford to put in such equipment. Most of these power producers are state-owned, and their pleas are being supported by the government’s own power and coal ministries. And in the budget, allocation for cooking gas – important to reduce indoor air pollution caused by firewood – is down by 59% from the last financial year.

Allocation to the Ministry of New and Renewable Energy (MNRE) was raised by 10.62% to Rs 19,479.74 crore (USD 2.74 billion). It still is 52% lower than the coal ministry’s budget.

Much of the rise in the MNRE budget is due to a push for off-grid renewable energy generation projects.

Vinay Rustagi, managing director of the renewable energy consultancy Bridge said, “There is nothing concrete in the budget for renewables apart from some vague statements on solar pumps and installation by railways. Funding for smart meters should improve distribution efficiency over time. Overall, the budget is highly disappointing as there was a lot of anticipation about new policy measures in view of the problems being faced by the sector.”

Charmaine Sharma, partner at Observing Ecotech LLP, a Gurugram-based green technology firm based in Gurugram on the outskirts of New Delhi, said, “The amount of funds allocated, that is Rs 22,000 crore (USD 3.01 billion), is for the entire RE Sector, which will include solar, wind, biofuels etc. However, the industry requires clarity on which government organisation/ministry/department will allocate these funds and on what basis.”

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