Union Budget 2010 and Power Sector
Dr D Shina, S N College, Kollam, mail achusina@gmail.com
The power sector seems not to be impressed in higher allocation and other encouraging steps announced by the Finance Minister in Budget 2010. Experts in the field feel that in view of the failure during the previous years in bringing out desired growth in installed capacity despite higher budget allocation called for new strategies and orientation.
The budget 2010 has announced a doubling of the plan allocation to Rs 5130 crore from the previous figure of Rs 2130 crore. The Government have an ambitious target of of capacity addition of 78,000 megawatts in the next two more years of the 11th plan.
Also a 61 percent increase in allocation for renewable energy sector to Rs 1000 crore suggests the Government’s change of focus to non conventional energy in the coming years. The National Solar Mission recently launched by the Prime Minister has been given boost in the budget by providing concessional customs duty of 5 percent to equipment for solar generating units. They have also been exempted from excise duty. Certain components for wind generators are also to enjoy similar exemption.
The growth in the previous years in both the areas, namely capacity addition and non conventional energy areas was not impressive. The reason cannot be fully attributed to the global recession. The lack of clarity in the orientation of reform process, insufficiency of the sops announced to offset the inherent risk involved in power sector, unscientific taxation policies which caused confusion in transmission sector etc are not seen addressed in the budget.
The creation of National Clean Energy Fund announced in the budget invoked mixed reaction. Though it would encourage utilization of eco friendly and non conventional energy sources its funding from cess on coal would adversely affect the power sector. The size of the fund, estimated to be above Rs 2500 crore, would be more than... [continues]
Dr D Shina, S N College, Kollam, mail achusina@gmail.com
The power sector seems not to be impressed in higher allocation and other encouraging steps announced by the Finance Minister in Budget 2010. Experts in the field feel that in view of the failure during the previous years in bringing out desired growth in installed capacity despite higher budget allocation called for new strategies and orientation.
The budget 2010 has announced a doubling of the plan allocation to Rs 5130 crore from the previous figure of Rs 2130 crore. The Government have an ambitious target of of capacity addition of 78,000 megawatts in the next two more years of the 11th plan.
Also a 61 percent increase in allocation for renewable energy sector to Rs 1000 crore suggests the Government’s change of focus to non conventional energy in the coming years. The National Solar Mission recently launched by the Prime Minister has been given boost in the budget by providing concessional customs duty of 5 percent to equipment for solar generating units. They have also been exempted from excise duty. Certain components for wind generators are also to enjoy similar exemption.
The growth in the previous years in both the areas, namely capacity addition and non conventional energy areas was not impressive. The reason cannot be fully attributed to the global recession. The lack of clarity in the orientation of reform process, insufficiency of the sops announced to offset the inherent risk involved in power sector, unscientific taxation policies which caused confusion in transmission sector etc are not seen addressed in the budget.
The creation of National Clean Energy Fund announced in the budget invoked mixed reaction. Though it would encourage utilization of eco friendly and non conventional energy sources its funding from cess on coal would adversely affect the power sector. The size of the fund, estimated to be above Rs 2500 crore, would be more than... [continues]
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