India is on the brink of a noteworthy transformation in its energy landscape, with the upcoming Union Budget 2024 poised to play a decisive role in shaping the country’s renewable energy and sustainability sector.
Projections from the Ministry of Power indicate a substantial 83% surge in investments in renewable energy projects, reaching approximately $16.5 billion in 2024. This surge underscores India’s commitment to a cleaner and more sustainable energy future, aligning with global efforts to mitigate climate change.
The main issues of the budget expectations reflect the opinions of many stakeholders in the industry. The need for long-term planning and a stable policy framework is emphasised, highlighting the necessity of further advancement in solar manufacturing. Important areas of focus include backward integration, building an ecosystem that is resilient, and establishing India as a world leader in solar technology.
Mr. Vineet Mittal, Chairperson of Avaada Group stated his expectations, “We expect that a quota should be mandated for the use of green hydrogen, ammonia and methanol in sectors like fertilizers, chemicals, steel, refineries, etc. Besides, the government should also consider implementing a nationwide policy mandating the use of Green M15 fuel i.e. mixing 15% green methanol with petrol, in transportation and other applicable sectors, supported by incentives for producers and consumers to adopt this fuel. It will help in demand creation and reducing production cost.
“Besides, the government should also consider extending Section 115BAB of Income Tax up to 2030 for setting up of new manufacturing units for solar modules, electrolyzer and green hydrogen production.
“To boost the sectors and achieve desired targets, GST should be kept nil, initially, on Green Hydrogen and its derivatives, whereas 5% GST should be reinstated on Solar Power Generating System and its related parts. Like renewable energy generation projects, equitable interest rate should be levied for solar module manufacturing projects as currently these projects bear an additional interest of 50 bps.”
He further added, “We also expect that green hydrogen, and its derivatives should be included in the harmonised list of infrastructure sub-sectors as these sectors have the capability to transform the country into a Net Energy Exporter. Also, a mechanism should be developed to facilitate low-cost financing and provide benefits like accelerated depreciation for green hydrogen infrastructure investments.
“Customs duty should be exempted for importing green hydrogen technologies, equipment for production of renewable power (such as solar modules), manufacturing of green hydrogen (and its derivatives), such as electrolyzers, fuel cells, other imported components, etc., until adequate manufacturing capacity is established in the country.
“Last but not the least, the government should consider implementing a policy where each district with over 100,000 residents establishes a 50 MW solar plant. It ensures localized energy generation, reducing transmission losses and boosting energy security.”
India has made impressive strides towards meeting its renewable energy targets, solar energy accounts for a sizable portion of the country’s installed renewable energy capacity. It is projected that the budget will provide funding for workforce development, subsidies, and research and development (R&D) to maintain this pace. It is believed that lowering interest rates, introducing green bonds, and using creative financing techniques are essential to fostering an environment that is conducive to investment.
According to Mr. Sandeep Trehan, President, Marketing & Business Development, THINK Gas, “We hope that the budget’s potential initiatives for city gas distribution (CGD) players holds promise for accelerating the adoption of natural gas across the country. We expect the central government to coordinate with the state governments and bring about policy initiatives such as reduction in VAT or bringing natural gas under the GST ambit. We also expect the government to make usage of natural gas mandatory for areas where the infrastructure is ready and gas is flowing. All this will help achieve the government’s target of India becoming a gas-based economy and the share improving to 15% by 2030.”
Expectations also include fostering rooftop solar installations and streamlining land acquisition procedures to create a vibrant investor atmosphere. These actions are intended to support India’s leadership position in the solar industry globally as well as meet domestic demand.
“As polls approach, the budget is set to be a vote on account. Despite this, it offers a chance for targeted allocations, such as reducing reliance on solar panel imports and investing in a smart grid for seamless integration of renewable energy. Energy storage solutions and R&D are vital for the unpredictable nature of renewables.” Added Mr. Rishi Agarwal, Managing Director, Head – Asia, FSG
A common theme is the emphasis on Aatmanirbharta (self-reliance), calling on the government to give priority to indigenous development and to provide incentives for localised industrial projects.
At this turning point, the renewable energy industry is ripe for revolutionary expansion. Anticipations regarding noteworthy policy modifications and consistency in current regulations are in line with India’s audacious goals of constructing 500 GW of renewable energy capacity by 2030 and accomplishing carbon neutrality by 2070.
According to Mr Udit Garg, Director, Kundan Green Energy – “It is consistently demonstrated that hydropower plants across the spectrum: storage, run-of-river, and pumped storage provide immense benefits. However, this sector faces a lot of challenges – the financing sentiment in the hydro power sector has been quite damp in the past two years with no major financial closure being reported. Then, clearances from multiple departments during the project-planning stage consumes a lot of time. Uncertainty over the public acceptance of the project’s socio-environmental impacts; water sharing disputes; Environmental Impact Assessment issues; geological surprises; underdeveloped project location with lack of basic infrastructure and communication networks; power evacuation issues; and lack of skilled contractors/workforce are some of the other challenges faced by Hydropower sector.
“Keeping all these issues in consideration, I would like to recommend a few measures before the budget announcement this year. The Government may like to consider the need for central and state government’s cooperation to actively work towards hydropower promotion -the states’ water-sharing agreements should include hydropower development agenda; government’s cooperation in developing basic infrastructure as well as power evacuation infrastructure. Moreover, establishment of a nodal agency/ institution dedicated to hydropower development could be announced during the budget; Central and state governments could help in creating public awareness programs to highlight the importance of hydropower projects so that it minimizes the social barriers. The pumped storage hydropower plants can be incentivized for maintaining grid stability through the ancillary services and by acting as a water battery to support grid integration of intermittent renewables such as solar and wind.”
India’s clean energy transition depends on putting a strong emphasis on the development and use of renewable energy capacity as well as providing incentives for reliable energy storage technologies.
Dr. Malini Saba, Environmentalist and founder & chairman, Anannke Foundation says, “As we eagerly await Budget 2024, my expectations center around a robust commitment to green initiatives. While the ₹19,744-crore for the Green Hydrogen Mission in 2023 is commendable, concerns linger about meeting global demand. The budget must strengthen its focus on broader renewable energy projects, aligning with the ambitious goal of achieving 500 GW capacity by 2030. Innovation in green technologies, especially in battery storage and grid integration, is paramount for India’s global leadership.
The Green Credit Programme needs clarity on thresholds to incentivize sustainable practices, tapping into the anticipated $500 billion green finance market by 2025. Emphasizing a circular economy through budgetary support can yield a potential $624 billion annual benefit and a 44% reduction in emissions by 2050.
Budget 2024 holds the promise of catalyzing India’s transition to sustainable growth. Addressing these expectations will lay the foundation for a future where economic progress and environmental well-being coexist harmoniously. As a fervent advocate for positive change, I hope to see substantial allocations towards green energy solutions, creating a domino effect for both the economy and the environment. Let this budget be a beacon of hope for a sustainable future, contributing to a legacy of prosperity and well-being for generations to come.”
Anticipations about the domain of electric vehicles (EVs) encompass streamlining Production-Linked Incentive (PLI) programs, expanding the purview of current programs, and modifying the Goods and Services Tax (GST) to enhance cost-competitiveness, specifically in the lithium-ion battery industry. The budget is seen as a pivotal opportunity to lay the foundation for a sustainable, technology-driven future in Indian mobility.
“As the electric vehicle (EV) industry gears up for substantial growth in the coming years, it is imperative for the government to foster a supportive ecosystem. To stimulate investment opportunities, there should be encouragement for potential investors, coupled with essential reductions in GST rates for electric vehicles and charging stations. Additionally, easing the burden on the industry can be achieved through a decrease in import duties on electronic components.
“The industry is particularly hopeful for a significant GST reduction, aiming to bring it down from 18% to 5% specifically for lithium-ion battery packs and cells, given their pivotal role in the EV sector. A concerted effort in the budget towards enhancing the ease of doing business and facilitating the entry of local players into the market is crucial. Addressing aspects like component localization and ensuring easy access to necessary components will empower Indian companies, both large and small, to develop competitive products at competitive prices, further solidifying the sector’s growth potential,” said Mr. Dinesh Arjun, CEO & Cofounder, Raptee.
Another important factor is waste management, where stakeholders are calling for specific actions, such as funding for cutting-edge waste management technologies like waste-to-energy plants. It is expected that the budget will support the ecosystem for waste management and support India’s larger goals for sustainable development.
Renewable energy generation companies, especially the solar power generation projects are already enjoying a 10-year tax holiday period. There are companies working in the sustainability and waste management arena, which hardly find any tax benefits like Accelerated Depreciation on their fixed assets. I think passing on some benefit to the players in the sustainability ecosystem, would attract a lot of potential investments in this area and provide a boost to the existing players. Besides, the end consumers, i.e. individuals need an incentive to further their use of renewable energy products. Reduction of GST on Charging of Electric Vehicles from 18% could further consolidate the Government’s endeavor for a green economy. – Ms. Fatima Naqvi, Partner in Optimyze Finance LLP
“Agriculture remains a critical cog in the economic growth and our food sustainability. We are expecting the budget to announce a slew of policies supporting the startup ecosystem around agritech. We also expect programs which could bridge the gap between the entrepreneurs and the farmers at the grass root level by creating more incubator programs and providing fund support for the same.” – Mr. Shashank Singh, Co-Founder at Poshn
In the forthcoming budget, a pivotal focus lies in boosting Research and Development (R&D) in agriculture, fostering innovation in crop varieties and farming techniques. Additionally, the integration of blockchain technology promises heightened transparency, while the adoption of Internet of Things (IoT) devices aims to revolutionize precision farming, optimizing resource utilization and productivity.
According to Mr. Sudhanshu Rai, Co-Founder at Fyllo -“Agriculture is the backbone of the country with 15% contribution to the GDP and 120 Mn grower farmers. The horticulture sector contributes to 33% of the agriculture GDP with 16% of the sowing area. We rank second in fruits and vegetable production in the world but our share in the global market is just 1%. This is the sector if worked well, can increase the farmers income to INR 2.5 Lacs/acre and increase the country GDP/exports. The challenges that we face are mainly in the quality standard of global market These challenges could be solved using digital technologies like farm IoT and bringing new verities. The farm IoT coupled with mobile app doesn’t only help farmers grow export quality produce but help them reduce the usage of fertilizers by 25% and irrigation by 40% (over and above the drip irrigation). We spend ~2Lac crores on fertilizers subsidy and much more on power subsidy and irrigation systems like canals etc. If we restructure it and support with farm IoT we could be saving double than the incentives given to farmers to adapt farm IoTs.”
As per Mr. Amitt Nenwani, Founder of Wahter which is launching India’s only Branded Packaged Water at Re. 1 per 250 ml bottle – “As a sustainability-driven startup in the retail sector, specializing in eco-friendly packaged drinking water, we eagerly await the Union Budget 2024 with expectations for robust support in fostering green practices. We anticipate incentives for eco-friendly packaging materials, investments in renewable energy solutions for production, and policies encouraging water conservation efforts. Emphasizing sustainability not only aligns with our commitment to environmental responsibility but also enhances the overall resilience and competitiveness of our startup in the eco-conscious market. By actively contributing to the circular economy, we aim to further solidify our role as a catalyst for positive environmental change. We look forward to a budget that not only supports our business but also promotes a lasting, sustainable impact on the retail industry.”
According to, Mr Ramesh S Ramakrishnan, Chairman, Transworld Group, “The Budget 2024 being an Interim budget will focus on development of Infrastructure – Railways and Road being of primary focus. A lot of attention will be given to infrastructure development of semi urban areas, tier 2 and tier 3 cities. We expect policies and incentives to be introduced to drive major growth and development of clean energy resources. We also expect to see strengthening of public private partnerships in promoting coastal shipping as energy efficient and low cost mode of transportation.
In the lead-up to the 2024 budget, anticipation mounts for initiatives promoting renewable energy and sustainable packaging. With a pressing need to combat climate change, stakeholders look to increased funding for renewable energy projects and incentives for eco-friendly packaging solutions. The budget holds the potential to drive significant progress towards a greener, more sustainable future.
“As the union budget 2024-25 draws near, Buyofuel envisions a strong emphasis on decarbonization, with a particular focus on bioethanol, green hydrogen and bio-CNG. We expect policy initiatives that not only foster innovation but also prioritize transparency, a core value of Buyofuel. The government’s renewed emphasis on sustainability resonates with our dedication to pioneering innovation and empowering our customers. Consequently, we eagerly look forward to encouraging biofuel policies, supportive incentives, structured frameworks, and robust monitoring mechanisms so that the wastes are better diverted into the biofuel value chain. A clearly defined long and short-term roadmap will be pivotal in ensuring India’s steadfast progression towards achieving its self-sufficiency and net-zero ambitions.” – Mr. Kishan Karunakaran, CEO of Buyofuel
To sum up, the Union Budget that will be presented soon would be crucial in helping India reach its goal of a USD 5 trillion GDP. The demands from many industries in the sustainability and renewable energy space highlight the necessity of a comprehensive and all-encompassing strategy.
The nation’s dedication to a cleaner, brighter future is reflected in the common thread of balancing economic progress with environmental stewardship. The budget’s role in catalyzing innovation, indigenous manufacturing, and sustainable practices will be crucial in propelling India towards its ambitious energy and economic goals.
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