To be attributed to Mr. Tulsi Tanti, Founder, Chairman and Managing Director, Suzlon Group
The World Bank’s Economic Prospects Report has forecast India’s economy to grow by 7.5 percent
during this and the next two fiscal years, retaining its top spot as the fastest-growing major economy.
India’s growth estimate is the brightest spot in a grim forecast for the world economy.
The continuation of the National Democratic Alliance (NDA) Government, led by Prime Minister Shri
Narendra Modi, augurs well for the key sectors of the economy, including the renewable energy sector,
which has been focus areas of the Government.
The industry is looking for huge stimulus for investment, push for ‘Make in India’ initiative, lowering of
taxes and streamlining of GST so that tax collections will go up and investment will be improved.
Given this background, the following are the key expectations of the Renewable Energy (RE) industry
from the upcoming Union Budget.
• Re-introduction of accelerated depreciation at a rate of 80% for windmills and solar projects to retail
investors with project size less than 25 MW. The step, besides providing a level playing field for SME and
small investors and continue diversity in investments in the sector, will also benefit Central Public Sector
Enterprises (CPSEs).
• GST on services relating to setting up, power evacuation and operation & maintenance services
(OMS) of a Renewable Energy project should be capped at 5% from the present 18%. The services for
Balance of Plant (BOP) that is the services required for setting up and power evacuation of Renewable
Energy Project should be taxed, at the rate of 5%. Tax Operations & Maintenance Services (OMS) should
also be taxed at a rate of 5%
• Concessional rate/ preferential rate of finance is required with a 2% rebate as cost and availability
can potentially impact viability. This will directly benefit consumers as energy prices will be kept low.
• The export incentive must be hiked from the present 2% to 10% to make Indian exports competitive
in the global market. Also Power Finance Corporation (PFC) and Indian Renewable Energy Development
Agency Limited be mandated to allow issuance of the line of credits to OEMs for exports from India
• The activity of generation and distribution of power should be included in provisions of section 32(1)
(iia) (Additional depreciation), 32AD (Investment allowance for setting up projects in backward area of
AP and Telangana) and 115BA (Section allowing an assesse to opt for concessional rate of tax of 25%)
• The profits of the undertaking engaged in the business of generation and distribution of power and
infrastructure business were allowed to be reduced from the book profits for the purpose of calculating
MAT. This should be restored.
• Open access and ISTS charges waiver (like SECI bidding) to all manufacturing units for their captive
power requirements should be allowed.
• Create recurring income for farmers through the Farmer’s Scheme in FiT based projects.”
