The Union Budget 2022-23 presented by finance minister Nirmala Sitharaman is a progressive one for the energy and green infra sector. It is also an enabler for climate control and clean energy transition, say industry experts.
“The Budget has considerable focus on overall infrastructure development across the country which underscores the growth opportunity for the power sector. The government’s focus on energy transition and climate action is also commendable and reinforces strong commitment towards sustainable development,” says Samir Mehta, chairman, Torrent Group.
The Budget has rightly focused on infrastructure, which is critical to drive growth in both short and longer term, says Sumant Sinha, Chairman and CEO, ReNew Power. "The push towards infrastructure creation, digitisation, clean energy, financial access, and inclusive development were big highlights of a growth-focused budget. The far-sighted move to rationalise import duties for specific sectors such as capital goods, supported by PLI for critical sectors, will help Make In India in the long term, creating many more jobs," says Sinha, noting that now execution will be crucial.
Sunil Mathur, managing director and chief executive officer at Siemens, says the growth-oriented budget with a focus on productivity, climate action, financing investments, and PM Gati Shakti plan, are steps in the right direction, and should positively impact the economy. "The increased capex outlay of ₹7.50 lakh crore further demonstrates the intent of the government to create the necessary impetus for the economy," he says.
"Four priority areas in the budget, PM Gati Shakti, Inclusive Development, Climate Action, and Energy Transition - will steer India toward sustainable development with a strong focus on financial support to MSMEs and expansion of emerging sectors such as solar power, EV infrastructure, railways and data centres," says N Venu, MD & CEO, India & South Asia, Hitachi Energy.
"Clear emphasis on technology and digitalisation with due consideration to upskilling the youth and R&D to build back better are a big positive. While some important elements such as a new SEZ legislation, funding schemes for new metro rail systems and cleantech, urban planning to promote sustainable living, battery swapping policy appear to be a work in progress. The government has laid the blueprint for growth over the coming two-three decades," he says.
India is poised to regain its title of the fastest-growing large economy with a 9.2% GDP growth estimated for the coming year, says Alain Spohr, managing director, Alstom India & South Asia. "With an enhanced capital expenditure outlay of 35% as compared to last year, core infrastructure segments including Railways and Urban Transport stand to benefit and will have a huge multiplier effect on the economy," he feels.
Mobility and electrical industry experts also point out the budget has many positives for the industry like introduction of 400 new Vande Bharat trains over the next three years, introduction of the state-of-the-art KAVACH TCAS signalling systems over 2000 kms of railway network, larger investments to provide for sustainable and integrated urban transport systems. The total budget estimates of ₹23,875 crore for MRTS & Metro Projects will incentivise faster implementation of projects and the standardisation of metro design systems will provide the much-needed stability for manufacturers.
Renewable energy sector experts are also happy with the budget. "We welcome the additional PLI allocation of ₹19,500 crore for manufacturing high-efficiency solar modules for the existing wait-listed PLI bidders. This will strengthen the domestic solar manufacturing ecosystem, thereby reduce our import dependence, create jobs, attract investments and enable the Make in India vision," says Gyanesh Chaudhary, vice chairman & managing director, Vikram Solar. Additionally, the sovereign green bonds will boost green infrastructure development which will help in meeting India’s carbon emission reduction targets. Green bonds will also enable an international yield curve for Indian corporates leading to better pricing for bonds. The battery-swapping policy with interoperability standards will boost the electric vehicle (EV) ecosystem, he adds.
Extending the PLI scheme beyond modules to the complete solar value chain is the need of the hour and has been well recognised in the budget, says SK Gupta, executive director & CFO, Amp Energy India. "This will go a long way in ensuring that India becomes self-sufficient in this critical field in near future and will play a key role in ensuring that the sector is capable of providing green energy at highly competitive rates to the society in the long run," he says adding that making grid stage battery solutions as part of Infrastructure projects will give further impetus to seamless integration of renewable generation and distribution systems with improved grid stability. Domestic solar equipment manufacturing industry is also happy to notify the Basic Custom Duties on solar modules and solar cells effective 1st April 2022.
