The union finance minister will present the general budget 2014-15 on Feb. 28, 2015 in Lok Sabha. As per the Economic Survey, the outlook for the external sector is perhaps the most favorable since the 2008 global financial crisis and especially compared to 2012-13, when elevated oil and gold imports fuelled a surge in the current account deficit.
Tulsi Tanti, chairman and managing director of Suzlon Group said, ''The Government made a commitment at the RE-Invest 2015 for generation of more 217 GW of green energy by 2020, which translates into investments of USD 250 billion.''
In order to accomplish this objective, it is expected that the upcoming budget would give special emphasis on renewable energy; only then can the renewable energy segment receive investments leading to enhanced efficiencies and growth.
Besides the industry expects the Government to address some concerns on couple few fronts:
1.Financing - In order to have smooth flow of project and investments, it is important to accord priority status to renewable energy by the bankers, and longer amortization in line with the infrastructure sector to the tune of 20 years.
2.Lower cost of financing, as capita costs is the only major cost for a RE project, interest rebate may be given to RE projects that are sourcing from domestic manufacturers in line with BNDES/FINAME mechanism prevalent in Brazil.
3.Dovetail Make in India in SME sector , as the major costs for SME sector is interest & energy; if an interest rebate is given to SME sector to invest in RE for their captive utilization would lead to lowering and hedging their energy cost , making them competitive and robust (we have seen that happen in Textile clusters in Tirupur area of Tamil Nadu).
4.Adequate outlay to laying down green energy corridor for evacuation of electricity from planned RE projects in the future.
5.Create incentive mechanism for states that are aggressive in implementation of RE projects.
On the export front, with a large domestic market with indigenous manufacturing would make India an ideal country for boosting exports, however, it is important to also upgrade EXIM Bank of India to support exports on lines with US-Exim and China-Exim. As of now, with a limited equity capital base, EXIM Bank of India limits USD 200 million line of credit to any single corporate, while in RE sector alone, the requirement ranges from USD 500 million -1 USD billion.
