PV and wind star in India budget

Solar and wind were centre stage in the debut budget of India’s finance minister Arun Jaitley, who unveiled a raft of policies and incentives he claimed would help kick-start the building of clean-energy infrastructure in the country.

The budget – the first since the May election of new Prime Minister Narendra Modi – was swiftly welcomed by Suzlon chairman Tulsi Tanti as “growth-oriented and futuristic”, and one that could help the wind sector grow by 50% in 2014/15.

Jaitley set aside 10bn rupees ($166m) to back solar projects, half of it to support the development of so-called “ultra-mega” plants in Rajasthan, Gujarat, Tamil Nadu, and Laddakh.

The minister also announced a range of duty breaks and exemptions for production of solar and wind-related products. For example, a Special Additional Duty of 4% is waived on components and raw materials for production of wind turbines.

In response to what Jaitley called India’s “major concern” over power supplies, the budget extends a 10-year tax holiday for projects that begin generation, distribution and transmission by 31 March 2017.

“This stability in our policy will help the investors to plan their investments better,” said the finance minister.

A levy on coal production – called the clean energy cess – will be doubled, with the proceeds going to support clean-energy initiatives.

Suzlon’s Tanti said the government’s aim to provide 24/7 uninterrupted power supply to all homes “augurs well for the growth of the energy sector in India".

Tanti, who heads the country's biggest turbine group, said plans such as “green energy transmission corridors” would also help boost the wind sector, which is likely to see a boost in investment.

Modi – whose BJP party swept to power in India’s general election – was a clean-energy policy pioneer as leader of the state of Gujarat, and talked up his ambitions for renewables during the campaign.

Jaitley’s budget still has to be formally approved by parliament.