Funds to be allocated to 15 lakh farmers to set up 15 lakh grid-connected solar pumps under PM-KUSUM scheme
The Finance Minister, Nirmala Sitharaman, presented the Union Budget 2020 in Parliament on 1 February, 2020. The year 2019 was challenging both economically and in the renewable energy sector. This year’s budget has many provisions favoring the growth of the renewable energy sector. The provisions in India’s 2020 budget for the renewable energy sector in a nutshell are:
- The budget allocated Rs.22,000 crore for the Power and Renewable Energy Sector
- Prepaid Smart Meters: States will have to replace existing energy meters with prepaid smart meters
- The national gas grid will be expanded from 16,200 km to 27,000 km
- 15 lakh farmers will be provided funds to establish grid-connected solar pumps as per PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan)
- Steps to reform DISCOMs (distribution companies) will be made
- Hike in customs duty on imported electric vehicles
During the Union Budget speech 2020-21, Finance Minister, Nirmala Sitharaman said, “Further measures to reforms DISCOMs would be taken. I propose to provide Rs 22,000 crores to power and renewable energy sector for 2020-2021.”
“Taking electricity to every household has been a major reform of the Government. However, the distribution sector, particularly the DISCOMs are under financial stress. The Ministry (of Power) intends to promote smart metering. I urge all the state and union territories to replace conventional electricity meters by pre-paid smart meters in next three years. Also, this would give consumers the freedom to choose the supplier and the rate as per their requirements. This is a very important step in reaching electricity to all people,” Nirmala Sitharaman said.
During her speech, the Finance Minster emphasized 15 lakh farmers will be compensated to set up 15 lakh grid-connected solar pumps. 20 lakh farmers will be provided stand alone solar pumps. This provides energy sovereignty to farmers through the PM-KUSUM scheme. Sitharaman further added that the scheme has decreased farmers’ dependence on diesel and kerosene. The scheme also helps farmers establish solar power generation capacity and sell it to the grid through net metering. Additionally, farmers can now use their barren land to generate solar energy, thus increasing their sources of income.
During her speech, Nirmala Sitharaman further stated that the government has proposed and outlay of Rs.22,000 crores to promote the renewable energy sector for 2020-21. Over the last three years or so only around Rs.5,000 crores had been allocated to this sector. The renewable energy industry grew at just about 5.7% in 2019 owing to mitigating investments. This years’ budgetary allocation will be a boost to the sector, making India’s 2022 (175 GW) and 2030 (450 GW) clean energy targets seem more achievable.
Environment and climate change was a focus under the third theme of the budget 2020-21, which is ‘development and caring society.’ The finance minister also said the Indian Railways target to electrify 27,000 km of tracks. The government intends to use large-scale solar farms on land near the tracks to help power the railways and achieve this target. The Indian Railways has an ambitious target to be a net-zero emitter by 2030.
The Finance Minister also proposed a hike in customs duty on imported electric vehicles. This move is to encourage indigenous manufacturing of electric vehicles (EVs) and enable Make in India.
Under the environment and climate change initiatives, the Union Budget 2020-21 also makes allocations for the trajectory to be taken for old and outdated thermal power plants. Thermal power plants whose emissions are above pre-set norms will be shut down under the new provisions of the budget. Clean air is also a concern, with seven out of the top ten most polluted cities in the world being from India. The government has proposed to encourage states with one million plus population to make plans to implement measures to reduce hazardous air and move towards cleaner air and environment within the cities’ ecosystem. Overall, Nirmala Sitharaman’s budget for 2020-21 looks to be uplifting for the renewable energy and clean technology sector on the whole.
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