$1.8 Billion Of India’s Coal Tax Invested In Renewable Energy So Far

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Renewable energy has been the largest beneficiary of the coal tax tax revenue collected in India over the last seven years.

The Ministry of Finance in India recently revealed that it has allocated Rs 12,430 crore ($1.8 billion) from the National Clean Energy Fund to the Ministry of New & Renewable Energy between 2010-11 and 2016-17. The National Clean Energy Fund (NCEF) is replenished by coal cess (tax) levied on every tonne of coal mined or imported in to India.

Coal cess was introduced in 2010 at Rs 50 per tonne and was subsequently increased a number of times to the present level of Rs 400 per tonne.

Other areas where the coal cess revenue has been utilized are for water resources and river development, drinking and water sanitation, and environment and forests. These sectors have collectively received Rs 5,039 crore ($750 million) over the last seven years.

The total revenue from coal cess raised over the last seven years is Rs 54,336 crore ($8 billion) but only 40% of this has been transferred to the National Clean Energy Fund. This is among some of the reasons the government is being criticized for misusing the coal cess revenue.

With the government having a target of 100 gigawatts of operational solar power capacity by March 2022, it is really surprising as to why more revenue is not being diverted toward rooftop solar power systems as well as solar power parks.

In 2014, media reports stated that around $200 million is expected to be invested in a 1,000 megawatt solar power park planned by the Solar Energy Corporation of India at Mehboobnagar, Andhra Pradesh. One could expect a sharp jump in allocation towards the implementation of solar power parks. The government has officially increased the target to set up solar power parks from 20 gigawatts to 40 gigawatts.

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