Hero Future Energies’ MD & CEO shares their Budget expectations from Modi government on areas like Policy, Energy Storage, Renewable Hybrids, Tax etc
The budget wish list of Mr. Rahul Munjal , MD Hero Future Energies:
- Policy clarity on continuance of GBI incentives beyond 2017 (till 2022) should be announced
- National Clean Energy Fund should be utilized effectively for intended purpose, especially to drive innovation in the areas of Energy Storage, Renewable Hybrids, Smart metering, building of the green corridor etc
- Strict Enforcement of Renewable Purchase Obligations (RPO) through penalties, and/or rewarding conforming states (such as priority funding through Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY), Integrated Power Development Scheme (IPDS), Power Sector Development Fund (PSDF)
- Supporting policies to encourage setting up of Hybrid Power infrastructure (by creating a tax exemption framework and/or allowing banks to provide loans at subsidized interest rate). This would also solve a lot of issues related to land acquisition.
- Construction activities involved in the installation of wind/solar power projects, O&M work to be exempted from Service Tax (to be included as part Infrastructure).
- While including RE under Priority sector lending was a good start, the limit of Rs 150 million needs to be increased upto minimum of Rs 5 billion to make an effective impact in the capital intensive industry.
- Govt should announce easy retail lending facility to individuals interested in setting up rooftop systems on their roofs through Commercial Banks comparable to getting a consumer loan
- Domestic content requirement in grid-connected solar bids need to be discontinued as the focus should be on promoting a vibrant and internationally cost competitive solar module manufacturing industry.
- Govt could help the solar module manufacturers bring their costs down and match their prices with international module manufacturers through incentives like:
- Creating common infrastructure for Integrated Solar Manufacturing hubs and/or
- Exempting raw materials utilised for manufacturing components/ parts of solar power generating equipment and/or
- Exempting domestically manufactured Solar PV cells /modules, Solar SPV systems from VAT / CST )
- Tax holiday on Renewable power generation to be extended for a period of 5 years in one go. Benefit of the same should also be given for MAT computations.
- In order to achieve the 175 GW of installed RE capacity targets by 2022, massive funds would need to be raised by RE developers therefore it would be desirable that RE cos. be given greater flexibility to alter corporate structure. Govt. must consider exempting Capital Gain tax on transfer of capital assets to related parties in RE cos.
- In order to ensure adequate availability of skilled labour in Renewable Energy market, budgetary support/financial incentives should be provided to organisations involved in skill development activity in the RE space
The budget wish list of Mr. Sunil Jain, CEO, Hero Future Energies:
- The massive requirement of capital flow to develop renewable energy infrastructure, needs persistent support from GoI
- There should be continuation of GBI for wind at least for the next three years
- If GST gets implemented, renewable energy is likely to turn expensive, expected solution is to move renewable energy from exempt category taxation to zero taxation
- REITs and Infrastructure Investment Trusts (InVITs) are aimed at attracting funds in a transparent manner into the real estate and infrastructure sectors. Rationalization on policy front to check tax leakage from investing in InVITS will make it far more viable and attractive. Currently apprehension of investors is a hindrance from listing it on Indian bourses.
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