Budget Insights

Union Budget Insights

IEEMA welcomes the Union Budget 2020. Its clear focus on transition on energy transition through various measures that give boost to solar energy, storage, battery and e-mobility will pave the way to achieving India’s commitment on tackling clean energy and tackling climate change. The zero fossil fuel policy, Battery swapping policy and focus on charging infrastructure for EV ecosystem will provide the impetus to a future ready electrical and allied electronics sector.

We are happy that the Union Budget maintains the continuity of focus on increased infrastructure spending coupled with Atma-Nirbharta. To facilitate domestic manufacturing and to meet the ambitious goal of 280 GW of installed solar capacity by 2030, the additional allocation of Rs 19,500 cr for Production Linked Incentive scheme (PLI) for manufacturing of high efficiency modules is very welcome step. The idea to facilitate funding for clean energy projects and further targeted PLIs for e-mobility and clean energy value chain have the potential to change the course of India’s energy roadmap.

Battery swapping and support for distributed renewable energy projects are also critical announcements. Distribution sector is critical to achieving the vision of clean energy transition. Overall, this is a budget that we welcome with enthusiasm.

This is a progressive budget with emphasis on Renewable sector, Digitalisation, EV and investment on infrastructure projects will create huge opportunities for our IEEMA members to scale up their Business.

The budget is a fine balance to support economic recovery. The inclusion of green bonds in the borrowing plan is an interesting innovation. In terms of specific policy announcements, the move towards self-reliance through shield for domestic manufacturers i.e. calibration of custom rates to boost manufacturing of electronics, including smart meters supports the long-term goal of AatmNirbhar Bharat.

It’s a growth and development budget focused on Energy, connectivity, capacity building of the nation, Infrastructure investment, enhancement of the Digital economy. There are specific areas which could have been explicitly covered including the following:

Establishment of cold chain to reduce wastage of farm produce
Localisation of electronic components to enable low dependence and lower cost for Electric vehicles and charging Infrastructure
Incentivisation of large scale Energy storage to meet the energy supply gap and also reduce grid load and fluctuations
Some form of fiscal incentive for achievement of Energy saving in Commercial and Industrial sector especially.
To arrest the major problem of power leakage, Smart Metering infrastructure should have been laid out as a focus area, with a clear timeline to achieve 100% conversion from present electromechanical meters to Smart meters

The budget clearly spelled out its commitment to Decarbonization, Digitalization and Sustained Growth. Distribution reforms are already in play, to supplement, the budget added emphasis on Energy Efficiency, EV, Data Center, Skilling, Tax Rationalization, efficient supply chain, support to MSME and Startups… this is a great sign for a progressive economy.

Although emphasis was given to R&D in defense, but R&D and innovation focus need to be spread across sectors. In upcoming budgets will look forward for boost in exports, which will help Indian Industry to improve quality and cost.

A progressive Budget. Renewable sector, Digitalisation, EV and Infra Sector growth shall surely create opportunity for our IEEMA members to scale up their Business.

The honourable finance minister has reiterated the importance of Electrification and Digitalisation towards the larger goal of Sustainable Development. Steps to encourage local production and initiatives like the PM Gati Shakti plan are positives for the economy.