NEW DELHI: Finance Minister Arun Jaitley has allocated Rs 500 crore in Budget 2014 to push ultra-modern solar power projects in Rajasthan, Tamil Nadu and Ladakh. The funds may be routed through Solar Energy Corporation of India as seed capital.
Solar power panels will become cheaper as solar power gear makers will have to pay lower tax. This will give a boost to not only solar power project developers but also the government’s programme to set up one lakh solar powered irrigation pumps. Similarly, the minister has reduced customs duty on forged steel bearings for wind power turbines by 5 per cent.
The move to lighten the tax burden comes at a time when the domestic solar panel makers have been pushing for imposition of anti-dumping duty on imported equipment. Solar power equipment makers will have to pay lower excise duty on solar cells, modules and batteries, among other products.
The government wants to reduce the power utilities’ subsidy burden on electricity distribution to farm sector, which consumes 23 per cent of power consumption in India but accounts for only 7 per cent of the revenues.
Among others, the Centre wants to replicate the solar power project commissioned on Narmada canal in Gujarat. Jaitley has allocated Rs 100 crore for this in his maiden budget.
India has set a target of commissioning 20,000 mw of solar power projects by 2022. The newly-formed Narendra Modi-led NDA government wants to expand this target. However, this will require enhancement of domestic capacities to manufacture solar panels that are proving a roadblock for the government’s solar mission.