Union Budget 2021-22 has major focus on energy transition with clean energy

 The union budget 2021 has brought humungous hopes for uplifting the power and energy sector. Industry leaders also welcome government’s push to help ailing DISCOMs.
Today, Union Finance Minister Nirmala Sitharaman during her 2^nd Union Budget presentation gave a special focus towards monetizing the power sector, ailing DISCOMs by boosting the energy and power sector. During her speech, Sitharaman announced about infusing ₹ 1,000 Cr to SECI and ₹ 1,500 Cr to IREDA as an attempt to boost the non-conventional energy sector. She also strongly emphasised on power infrastructure schemes for DISCOMs development, smart metering and other feeder requirements that can stand the overall financial stability of the DISCOMs. During her speech, she said “There is a need to provide choice to consumers. There should be a framework to give consumers alternative of more than one DISCOM.
Mentioned are the key takeaways from Nirmala Sitharaman’s Union Budget Speech 2021-22 –

• Power infra scheme for DISCOMs infra development, smart metering, feeder separation: An outlay of ₹5 lakh crores over 5 years.
• The government is working on a framework that will give electricity consumers in India a chance to choose their DISCOMs or service providers.
• A framework will be given for consumers to choose from the alternatives of distribution companies.
• To support domestic manufacturing in the solar sector, The duty increased for solar inverters from 5 percent to 20 percent.
• Hydrogen energy mission for generating hydrogen power from green sources.
• “To give a further boost to the non-conventional energy sector, I propose to provide an additional infusion of ₹ 1,000 crore to SECI and ₹ 1,500 crore to IREDA,” Finance Minister said in her Budget speech in Parliament.
• ₹ 2217 crore allocation for 42 urban centers with 1 million population for ensuring clean air and environment.
• Two other significant announcements of this year’s budget with implications for the energy sector were focus on disinvestment, with the FM setting a target for 2021-22 at ₹ 75 lakh crore and stating BPCL disinvestment will be completed this year, and monetisation of public sector assets.
• Budget also lays focus on the Oil & Gas sector with increased outlay for the expansion of the City Gas Distribution (CGD) network and Ujjwala beneficiaries.
• On the lines of a Power system operation corporation (POSOCO) in power sector, this year’s budget also provides for setting up an Independent Gas transmission system operator for the gas sector. It is expected to ensure indiscriminate open access for buyers and sellers of gas and also facilitate operation of the gas exchange.

Sanjay Banga, President Transmission & Distribution, Tata Power
Tata Power welcomes the step announced today for the distribution sector reforms as most of the DISCOMs are reeling under huge losses, and finding it difficult to provide uninterrupted power supply. We also welcome the scheduled discussion on the Electricity Amendment Act 2021 during the ongoing budget session as when implemented in its true letter and spirit, the Act  will  provide the much needed independence to  the regulatory mechanism for an effective and timely decision making. It will also pave the way for  a  speedier implementation of the National Tariff Policy, a must  for the tariff rationalisation across all segments of consumers. This is very crucial for an overall industrial development for realization of Atmanirbhar Bharat. Besides the above, for the revival of the power sector the Government should use announced funds to provide transitional support to state governments who want to initiate distribution reforms by involving private sectors players.” said Mr. Sanjay Banga, President Transmission & Distribution, Tata Power.
Prabhajit Kumar Sarkar, MD & CEO – Power Exchange India Limited (PXIL)
“The Union Budget for 2021-22 presented by the Finance Minister Nirmala Sitharaman gave a big push to the power sector by announcing close to ₹ 3.06 lakh crore power distribution sector scheme. We welcome this move as it is expected to assist DISCOMs for infrastructure creation tied to financial improvements, including prepaid smart metering, feeder separation and upgradation of systems. Additionally, the government’s proposed framework to give consumers more than one DISCOMs choice was a much-needed move. It will help to enhance efficiency in the power distribution sector, induce fair competition and address the monopoly business of DISCOMs . Besides, we foresee that reforms such as ₹ 1,500 crore allocation for the renewable energy sector, 100 percent Railway electrification & expansion of metro rail networks and hydrogen energy mission for generating hydrogen out of green-powered sources will contribute significantly in enhancing the country’s power demand.
Deepak Chhabria, Executive Chairman, Finolex Cables Limited
Manufacturing is an integral part of global supply chains, with the potential of core competence and cutting-edge technology. To sustain the double-digit growth, some of the initiatives will help bring scale and size in critical sectors, develop and nurture global champions and provide employment to the youth. The power sector has seen several reforms and achievements in the past 5 to 6 years. The Union budget 2021 announcement on the expansion of the metro rail network and augmentation of city bus service will create more avenues for companies like ours. Also, reducing duty on copper scrap from 5 percent to 2.5 percent can benefit copper recyclers. With Atmanirbhar Bharat, the government has already unveiled plans in core sectors to stimulate economic growth and spur investments.‘
Imaan Javan, Director of Operations, Suntuity REI
We applaud the Government of India for having minutely looked through every aspect of the economy to indeed roll out a Budget ‘like never before.’ With the impact of the recent pandemic, it was imperative that the Govt laid emphasis on measures to both repair and revive the economy. The ₹ 1000 crore fund allocations to solar corporation will bring in the much needed respite.  In addition to that, no customs duty on solar imports of modules and cells will give an impetus to the developers to take up more projects thus enabling India to achieve the ambitious target of 175 GW by 2022. We believe that the forward-looking budget will springboard the growth of the solar industry in India, multiply employment opportunities and empower Indian to level up with her global counterparts.