Budget’s silver lining focus on EV and One Nation One Grid

Fortum India appreciates the various steps taken by the government in addressing the issues related to tax and duties in the renewable sector and electric mobility. As Fortum India proceeds in setting up fast-charging EV infrastructure in India, the reduction in GST and import duties will accelerate the deployment and usage of electric vehicles in India. We now see a lot of action in the electric mobility, charging and storage space in line with the government’s green vision, which is very encouraging for the industry. We, at Fortum, wish to collaboratively work with vigour towards government’s aim of having 30 per cent electric vehicles by 2030, by continuing our investments in recycling the capital.
– Sanjay Aggarwal, Managing Director, Fortum India
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The budget is a positive push for adoption of EV in India and is in line with the series of steps taken and announcements in that direction; namely on 4 counts – 3 direct and one indirect aspect is important from that perspective. While the total cost of ownership was always in favour of EV, the announcement in the reduction of GST rate on electric vehicles from 12 to 5 per cent reduces the upfront higher cost as against an ICE engine and improves the buying decision in favour of EVs.

The additional income tax deduction of 1.5 lakh on interest on loans taken to purchase electric vehicles is a bonus and the industry had not anticipated that. Credits to the government for this innovative idea to push for EV.A day ahead of the budget 2019, the government lowered customs duty on import of parts and components. This will drive domestic assembling of electric vehicles, which today is plagued by Chinese imports and is actually hurting the EV industry. The EV industry primarily belongs to start ups and will not be the domain of large monoliths. The push to simply and support the Startup ecosystem will in effect push the EV growth a lot faster.
– Maxson Lewis, Managing Director, Magenta Power
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The Union Budget presented demonstrates the government’s vision of putting India on the path to sustainable development and takes forward the government’s commitment to cleaner environment as was highlighted in the interim budget. TERI highlighted the following environmental issues that are important in light of the announcements in this budget –

E-mobility: The electric mobility sector has been given a booster in terms of tax benefits. This will accelerate the deployment and usage of electric vehicles in India, resulting in cleaner air and greater usage of renewable energy.
Renewable energy: Among the big ticket ideas of the budget is the scheme to promote mega investment in sunrise and advanced technology areas and among the industries prioritised are solar photovoltaic cells, lithium storage batteries, and solar electric charging infrastructure. These are likely to give a huge boost to renewable energy. The next thing is to focus on storage, in which the lithium batteries will play an important role. It is also important for development of electric vehicles industry in India which the budget has also tried to promote. The idea of Annadata to Urjadata to help farmers use their land to generate energy is also commendable.
– Ajay Shankar, Distinguished Fellow, TERI
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With the economic viability of the solar power coupled with the fact that conventional energy sources now have to match solar parity, it would have been heartening to see more focus on the solar segment to promote ecological stability. The infusion of 70,000 crores in the PSBs to stabilise the economy will in-turn benefit the NBFCs, which, in the absence of a recognised banking unit to support small mid scale solar financing, will provide an impetus to the solar project financing. However, the invitation to foreign PV manufactures to set-shop in India, without prior stabilisation of the domestic manufacturing market, is premature and may prove to be counterproductive for the demand in the sector, which will render the NBFC financial support redundant.

The Government has been indicating some changes in the solar segment for a while; however, we believe that there are critical gaps that need to be plugged. On one hand, while the safeguard duty provided the industry with interim relief, the short sighted implementation of a year holds the proverbial sword of uncertainty in the industry. Moreover, lack of tangible movement on the anti-dumping policy has dampened the business projections in segment. The only silver lining in the budget is the progressive movement towards adoption of electric vehicles (EVs) and the incentives being offered to the end consumer. With the promotion of clean energy through the use of EVs is likely to boost the demand in the segment, thus providing impetus to achieve economies of scale and in-turn create a viable ecosystem.
Sunil Rathi, Director, Waaree Energies
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The power sector being the fuel and a major part of the economy affects various other sectors in a direct or indirect way. We are encouraged by the varied interventions of the government towards power tariff and the One Nation, One Grid model that will ensure power connectivity to various states at affordable rates. The government’s announcement to improve and discuss the UDAY-II scheme for a better financial and operational turnaround of DISCOMs will help various other inter-linked sectors to grow and enhance their structure to better suit the needs of its beneficiaries. We appreciate the government’s intent to support the renewable sector through the tax deduction for production of lithium storage, solar PVs and other equipment as well as the allocation of more than 3,900 crore for wind and solar power. India is in the path of maximising its renewable energy potential in line with its commitments towards mitigation of climate change. We are hopeful that all stakeholders will work together to help India achieve its renewable energy goal.
Ratul Puri, Chairman, Hindustan Power projects

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With the government’s vision towards One Nation One Grid India is set to uncover a new frontier of development with its mission to ensure 24/7 power supply throughout the nation. As expected, the current budget continues to stress on government’s focus on sustainable growth and infrastructure development. The announcement of increase in allocation of funds towards building renewable energy capacity is sure to present newer avenues of growth in the employment way for an improved quality of life for communities across the nation. While the true test lies in the implementation, Danfoss believes that the government’s vision towards Make in India and Sustainable Growth will translate to India emerging as a front-runner of development at a global level.
Ravichandran Purushothaman, President, Danfoss India
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We were enthused at the announcement of One Nation, One Grid that will ensure power availability at affordable rates. While this is extremely heartening, we would appreciate that the government also pay attention to the quality of power being distributed and raise the efficiency of the grid and reduce economic losses. Further, the House for all by 2022 mission and additional tax benefits for home owners will enhance access to affordable housing.

We need to encourage EV adoption in India by incentivising the purchase of electric vehicles and developing charging infrastructure. With further support of lower GST rates and income tax incentives, electric vehicles will become affordable and accessible to the consumers. We welcome the announcements as the government works towards reduction in India’s carbon footprint.
Sanjeev Ranjan, Managing Director, International Copper Association of India
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We are glad to see the direction given by the government by outlining the key areas as a part of the broader vision for the future with Energy for All at its very core. It is a well balanced budget with a clear push towards the socio-economic growth and development of the country. The focus given to provide access to energy to each and every household in the rural and urban areas is very progressive.

There is a visible push for new age technologies and digital solutions as the budget specifically mentioned the importance given to Artificial Intelligence, Internet of Things, Big Data and Digital India  which are an integral part of the long term vision. With an eye to boost up the economic growth and Make in India, the proposal to launch a scheme to invite global companies to set up mega-manufacturing plants is laudable. All in all, it is encouraging to see the government’s continued focus on the programs- UJALA, Saubhagya and UDAY Yojana as key initiatives to the nation’s economic growth, with an even greater focus on digitisation to boost the rural economy.
Anil Chaudhry, Zone President & Managing Director, Schneider Electric India
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The industry was expecting a policy direction from the government to promote the manufacturing through Make in India program, especially in the renewable energy sector. Government announcement to launch a scheme aimed at encouraging global companies through competitive bidding process to set up mega-manufacturing plants in sunrise and advanced technology sectors appears to be a step forward in that direction.

We welcome this move as it will boost the Make in India programme. Having said that, setting up mega manufacturing plants of solar photo voltaic cells and modules require a larger support structure in the form of soft loans, export credits in order to compete globally etc.
Rajendra Kumar Parakh, Chief Financial Officer, Vikram Solar

 

 

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