The power sector is hoping in Budget 2015-16 the government will announce steps to improve the investment environment for private companies. The clean energy sector, which has been set steep targets, is looking for more government funding.
In Budget 2014-15, the government had announced several schemes for strengthening the power transmission and distribution sector. However, these failed to attract substantial investment..
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“We hope this Budget will distinguish between bankable and non-bankable sectors. Currently, the government continues to provide funding to perfectly bankable sectors such as roads, power transmission and hydroelectricity. This needs to come to an end. Private capital is perfectly capable of funding these bankable sectors,” said Pratik Agarwal, director (infrastructure), Vedanta group.
Experts say in trying to figure how to fund the $1-trillion expenditure in infrastructure, the government should focus on central funding on social sectors such as water, sanitation, health care, education, rural electrifications and rural broadband. “The government should decide to not spend even a penny of its precious capital on bankable sectors and allocate its own capital to creating social infrastructure. These are great uses of exchequer funds,” said Agarwal.
Last year, the government announced ambitious targets for the renewable energy sector. But the segment is in dire need of government funding to boost investor confidence. The budget of the Ministry of New and Renewable Energy stands at only Rs 2,500 crore. Senior officials said as was the case every year, they had requested the budgetary allocation to this ministry be increased.
“Given the new government is keen on increased capacity addition in clean energy, we are hopeful of getting a healthy budget this year,” said a ministry official.
In the Budget last year, coal cess was doubled from Rs 50 a tonne to Rs 100 a tonne, to be diverted to the National Clean Energy Fund.
Of the funds allocated in the earlier Budget, Rs 6,000 crore is yet to be disbursed to the renewable energy ministry.