Back to Growth: Union Budget 2021-22 announcement – Renewable Energy
The Union Budget 2021, announced by Finance Minister Nirmala Sitharaman on February 1, 2021, outlined reforms and initiatives towards boosting the non-conventional energy sector in India. These initiatives are in line with the ambitious renewable energy targets of achieving 450 GW by 2030, set by Prime Minister Narendra Modi.
The budgetary measures announced for the renewable energy sector are highlighted below:
- The budget provided a capital infusion of INR 1,000 crore to Solar Energy Corporation of India (SECI) and INR 1,500 crore to the Indian Renewable Energy Development Agency (IREDA). This measure will give a boost to funding for renewable energy projects in India and increase liquidity in the sector.
- Reiterating India’s focus on alternative and clean sources of energy, the budget proposed the launch of a Hydrogen Energy Mission in 2021-22 for generating hydrogen from green power sources.
- To encourage domestic production and build domestic capacity, the duty on solar inverters has been increased to 20% (up from 5% earlier), and the duty on solar lanterns has been increased to 15% (up from 5% earlier).
- Following the clarion call for ‘Atma Nirbhar Bharat’ and ‘Vocal for Local’, the government is planning to release a phased manufacturing plan for solar cells and modules.
The budgetary measures announced for the non-conventional power sector are forward looking and display India’s strong resolve towards developing newer fossil-free energy sources and making them abundantly available with lower cost, as we ramp up technological innovation and scale within the sector.
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