Published on March 4th, 2015 | by Smiti5
India Allocates $400 Million For Renewable Energy Expansion In Annual Budget
March 4th, 2015 by Smiti
The Indian government announced monetary support for renewable energy expansion and adaptation to climate change in the financial budget announcement for fiscal year 2015-16.
India’s Finance Minister Arun Jaitley announced the government’s decision to increase the renewable energy capacity addition target for 2022. India now aims to have an installed renewable energy capacity of 175 GW by 2022. 100 GW of this would come from solar power, 60 GW from wind energy, 10 GW from small hydro power, and 5 GW from biomass-based power projects.
During FY2015-16 (April 2015 to March 2016), the government has set a capacity addition target of 4,460 MW. This would mark an increase of 24% over the capacity addition target set for FY2014-15. However, only 44% of the FY2014-15 target had been achieved during the first 9 months.
To facilitate the installation of this capacity the finance minister allocated about $400 million. These funds would be used for installation of grid-connected as well as distributed renewable energy projects.
The finance minister also announced reduced tax rates for manufacturing of some components used in solar water heaters and solar power projects.
Electric and hybrid vehicles received special attention from the government which now also seems concerned about the growing air pollution problem in the country. About $12.5 million has been allocated to boost manufacturing of electric and hybrid vehicles in the country, while concessional taxation rates on the import of components used in manufacturing of such vehicles has been extended.
The government also doubled the tax on every metric ton of coal imported or produced in the country. The revenue collected from this tax goes to the National Clean Energy Fund (NCEF) which is used to finance renewable energy projects. While the tax has been doubled, for the second consecutive time — to $3.3 per metric ton — the allocation to the NCEF remained the same at around $780 million.
Another significant announcement was regarding climate change adaptation. The government has allocated $27 million to programs dealing with adaptation to climate change, although the minister did not elaborate on the specific adaptation programmes.