Budget 2014: Confusion over tax concessions to wind energy sector
NEW DELHI: ArunJaitley’s Budget speech was available in Hindi and English, identical in all respects, save one.
And that difference has the wind energy industry teetering between hope and despair because it isn’t clear which version is right, at least not till the time of going to press.
The Hindi version promised the re-introduction of a tax break. The English one, which the finance minister actually read out in Parliament, is silent on the matter.
The tax concession is so attractive that, when originally introduced, it persuaded many of the rich and famous, including film star Aishwarya Rai, to invest in windmills.
A line on Page 22 of the Hindi speech reads: “Pavan urja ka tvarit vikas karne kay liye main tvarit avmulyan kay fayde ko punh bahal karne ka prastav raktha hun (I proposed to reintroduce the benefits of accelerated depreciation to accelerate the growth of wind energy).”
Wind turbine makers, who have been pressing the government for two years to reinstate the benefit, don’t know whether celebrations will be premature.
They have flooded the ministry of new and renewable energy with queries, but officials were unable to offer any clarifications. A government official said the ministry would take up the matter with the finance ministry. “We are hopeful that the outcome will be favourable for the wind power sector,” the official told ET.
Earlier, investors could write off 80% of their investments in wind energy in the very first year, helping them save income tax and instal captive power generation capacity to reduce electricity bills.
According to industry estimates, investors in close to 16,000 MW of the country’s total 21,262 MW installed wind capacity have availed the benefit of accelerated depreciation.
After it was withdrawn, the wind energy industry suffered a severe drop in new wind power installations.
In 2012-13, India added only 1,700 MW of wind power capacity as compared to 3,200 MW in 2011-12 after the benefit was ended. In 2013-14, the industry performed slightly better, with capacity addition of 2,000 MW.
India is one of the biggest wind energy producers in the world. The country has also aggressively promoted solar energy as the government strives to promote clean sources of energy to help protect the environment and reduce the country’s dependence on oil and coal.