The Union Budget 2018, presented by Union finance minister Arun Jaitley on February 1, 2018, has been generally welcomed. T&D India brings to you reactions by eminent industry players.
Accelerating domestic manufacturing
With revival of the manufacturing sector, the Union Budget aims at increasing demand and economic activity in the country by accelerating domestic manufacturing rather than depending on imports. For domestic manufacturing to thrive, the adoption of IIoT (Industrial Internet of Things) is imperative to bridge the OT/IT gap for ensuring improved safety, cost reduction and streamlined regulatory compliance.
The budget has firmly focussed on driving digitisation and Internet of Things (IoT) in the country by allocating Rs.3,073 crore for the same. Such initiatives will give a push to the IIoT combining IoT and Artificial Intelligence thereby providing fillip to the manufacturing sector across the country. Also the reduction of corporate tax from 30 to 25 per cent for MSME industries is expected to boost investments in manufacturing. Strengthening of the domestic manufacturing will considerably reduce our country’s dependence on imports and this will have a cascading positive impact on the economy as it will reduce fiscal deficit and create employment opportunities across in India.”
—Meenu Singhal, Vice President, Industry Business, Schneider Electric
Budget aims to reinvent New India
The budget is clearly focused on reinventing a New India, with specific measures announced for strengthening the rural and agricultural economy in addition to infrastructure development. It is aligned to the objective of overall economic growth, Nation building and job creation. This budget, takes into account various stakeholders across the spectrum, right from the social sector, businesses, young India and the senior citizens.
The budget has given significant impetus to MSME’s who are the backbone for the wind energy sector of India, as they manufacture components and provide various services. Reduction of corporate tax for MSME’s will help them to reinvest the surplus capital in establishing newer units to meet the overall target of 175 GW renewables by 2022. Also, government’s initiative to recapitalize PSU banks, enables the banks to provide loans to MSME’s.
Overall the measures on the economic reforms, ease of doing business and impetus for the social sector are steps in the right direction for the growth of Indian economy in the long-term.
—Tulsi Tanti, Founder & CMD, Suzlon Group
Solar water pumps is a good move
In this budget, the Honorable Finance Minister has announced an innovative scheme which will accelerate solar water pumps installations by farmers. Government of India will be taking necessary measures to encourage distribution companies to purchase excess solar power generated by the farmers while harvesting the sun’s energy for the solar pumps. This innovation of combining the usage of solar energy for power needs as well as a source of earnings will be a paradigm shift in the manner solar energy is utilized by majority of farmers in this country.
—Ashish Khanna, ED & CEO, Tata Power Solar
Infra thrust augurs well
The emphasis on Infrastructure spending augurs well for companies catering to this sector. Further, strengthening of railways through capex of Rs.1,48,558 crore will benefit companies like CMI Ltd that counts Indian Railways as its largest customer.
—Amit Jain, MD, CMI Ltd
Not very encouraging for solar energy sector
Budget 2018-19 is not very encouraging for the renewable and solar energy sector. The government has missed out on a major opportunity to take a lead towards combating climate change. The recently released Economic Survey highlights the impact of climate change in India especially to farmers. It mentions that rainfall extremities have increased in the past 10 years and climate change can potentially reduce farmer’s income by the range of 20-25 per cent. Renewable energy, especially solar can play a very crucial role to reduce the impact of climate change on our communities.
Unfortunately budget has not taken steps to create an ecosystem which would make combating climate change a possibility. The budget has very limited allocation to MNRE with a target to achieve 11 GW of installations in the next financial year. Allocation to SECI has also seen a reduction. A large chunk of the coal cess which was earlier transferred to National Clean Energy Fund now goes towards GST compensation fund. The budget does not talk about any alternative mechanism which would fund clean energy installations in India. In terms of energy security, currently we import 85-90 per cent our solar modules, which threatens our energy security. The current provisions in the budget does not mention any support for the manufacturing industry which has been highly discouraging for the sector. We hope that government will take additional steps to increase installations of solar power plants by providing direct and indirect support.
—Gyanesh Chaudhary, MD and CEO, Vikram Solar
Increasing convenience for the common man
The Union Budget 2018-19 is certainly a positive move that aims to increase convenience for the common man. Given the rising urban population, safe and effective traffic solutions are imperative in managing crowds.
—Sebi Joseph, President, Otis India
Boosting Make in India in defence
Finance Minister Arun Jaitley’s move to set up two defence production corridors is the right step to boost the `Make in India’ initiative aimed at self-sufficiency in ammunition procurement. It also compliments initiatives taken in the past to nurture domestic defence production capability that will make India self-reliant in meeting our defence needs.
—Manish Nuwal, Managing Director and CEO, Solar Industries India Ltd
Emphasis on rural electrification
The Union Budget 2018-19 has laid emphasis on rural electrification with an allocation of Rs.16,000 crore, to provide electricity to nearly four crore poor households. The Prime Minister’s Saubhagya Yojana under which poor households are given free electricity connections is going to be life changing for the country’s hinterland. The Budget today has sought to achieve universal energy access with focus on expanding the coverage of flagship schemes, a positive step towards the development of rural India.
The Prime Minister’s smart cities mission found a prominent place in the Union Budget 2018-19 given that the 99 smart cities will be allocated Rs. 2.04 lakh crore. The continued budgetary support given by the government is a progressive step in creating 100 smart cities with state of the art technology, infrastructure and standard of living. India is at the helm of urban planning and development and such encouragement to Infrastructure will prove to be a growth driver for the country.
—Rajiv Menon, Managing Director, Black & Veatch India
Aiming at 24×7 Power for All
The Union Budget’s focus on digitisation and its commitment to the Pradhan Mantri Saubhagya Yojna for electrifying all households with an allocation of Rs. 16000 crore clearly emphasises the government’s agenda of ‘24X7 Power For All’. Further, the allocation of 2.04 Lakh crore for the Smart City Mission will add momentum of our cities turning more efficient in usage of energy. Accelerating these flagship schemes is stepping the pedal on the pace of sustainable urbanisation and larger economic growth.
With the investment momentum into the smart cities and power sector going up and focus on renewable energy space significant business opportunities will be created. Also, starting a mission on cyber security and setting up a centre of excellence by Department of Science is a welcome step from government towards better integration of technological advancements in the power sector.
—Prakash Chandraker, Vice President & Managing Director, Energy Business, Schneider Electric
Boosting solar power in India
Fortum India congratulates The Honorable Finance Minister, Shri Arun Jaitley, on addressing several key issues and challenges faced by the country in the Union Budget 2018-19. We continue to view India as a strategic investment for us. The renewable sector is rapidly growing and this year’s budget has some important announcements with respect to the solar power industry. The first is to buy surplus solar power generated by farmers in solar parks. Once the roadblocks are addressed in both policy and infrastructure, there is anticipated to be much uptake of solar rooftops.
In addition, the government has streamlined the capital allocation towards creating solar parks and associated infrastructure for the sector. These are all signs that the Indian solar power industry is likely to grow and create more jobs with expansion of this sector.
Together with the government, we look forward to work collaboratively by contributing towards technology and provide smart solutions to support India in its journey and make it an energy-reliant country.
—Sanjay Aggarwal, Managing Director, Fortum India and Global Head for Solar Power at Fortum
Smart Cities will spur renewables
With a thrust on smart cities and identification of 99 cities under the ambitious Smart city mission will give a major boost to the clean energy sector as Smart Cities have a large component of Renewable Energy.
Smart Cities Mission aims at building 100 smart cities with state-of- the-art amenities that incorporates renewable and natural resources with great emphasis. It is a clear indication that the focus on ‘green energy’ is one of the top priorities of the government. It will also boost the solar rooftop industry.
These cities will be enabled by various projects like Smart Command and Control Centre, Smart Roads, Solar Rooftops, Intelligent Transport Systems, Smart Parks. Projects worth Rs.2350 crore have been completed and works of Rs.20,852 crore are under progress. We expect will create a platform for the Supervisory control and data acquisition (SCADA) industry as well.
Even though there has been a 6 per cent excise duty on solar tempered glass has been proposed, the basic customs duty on solar tempered glass for use in the manufacture of solar cells, panels and modules has been proposed to be eliminated.”
—Anmol Singh Jaggi, Director, Gensol Group
Infra focus continues
A stronger push has also been given to urban mobility by focusing on improving access facilities for passenger convenience in places with high urban density like railway stations and airports.
The railways have received a major thrust from the government as 600 stations have been identified for upgradation by the railways. All the railway stations with more than 25,000 footfalls will have escalators. Such upgrades will undoubtedly help move people faster at railway stations and make the entire travelling experience more convenient.
The proposal to enhance airport handling capacity five-times to one billion trips and the allocation of Rs.2.04 lakh crore for the development of the 99 identified smart cities will also catalyse the growth plans of the country.
—Ravi Kirpalani, CEO, thyssenkrupp India
Sharp focus on economic growth
Access to Energy has been one of the key agendas of the government and the commitment to this critical human development index has been strengthened with an allocation of Rs. 16000 crores to the Pradhan Mantri Saubhagya Yojna for electrifying all households. Access to clean energy remains a critical component of this agenda as the budget highlighted.
The focus on improvement in quality of urban living was reiterated with the additional budget of 2.04 lakh crore for the Smart City Mission. This will add momentum to the transition of our cities into ultra-modern habitations made efficient with strong technology.
We welcome this forward-looking union budget with its eyes set clearly on future economic growth. The budget is focussed on achieving this by pushing forward the critical segments of the economy, from infrastructure, micro small and medium businesses, education and skill development to agriculture, each powered by digitisation and cutting-edge technology.
—Anil Chaudhry, Country President & Managing Director, Schneider Electric India
Improving sustainability is a key measure
We appreciate the Union Budget’s vision of the power sector as enabler of the common man’s access to the benefits of infrastructure development. This can be seen in the provisions for electrification of 4000 km of existing railway lines, bringing 4 crore unconnected homes to the electricity grid at an outlay of Rs. 16,000 crore, and providing LPG connections to 8 crore women. We look forward to the power sector focusing not only on the reach of solar power, but also its quality and accessibility.
The budget also strengthens the government’s focus on sustainability and reduction of subsidies, through utilization of agro-waste to CNG and biogas, and a renewed focus on solar electricity pumps. A lot of focus has been given to rural income generation, import duty increase should also create demand for Indian growth.
—Ratul Puri, Chairman of Hindustan Power
Inclusive and growth-oriented
This is an overall inclusive growth augmented budget with special emphasis on the backbone of the economy: Agriculture, Health, Education and Infrastructure. We welcome the finance minister’s announcement of allocating Rs.1.48 lakh crore towards capital expenditure for Indian Railways, which is the highest ever amount provided till date for this sector. The Railway’s focus on modernization of signaling and safety systems along with optimum electrification will not only enhance the efficiency but can also move a large amount of trade traffic from road to railways.
Most ancillary companies affiliated with rail infrastructure should benefit on account of this huge proposed capex allocated towards rail infrastructure.
—Suramya Nevatia, CEO, Hind Rectifiers Ltd
Extremely balanced, manufacturing sector gets attention
The budget this year was extremely balanced, and restored our belief in the Government for ensuring continues growth of Indian manufacturing sector. Coupled with the sentiments on the provisions for boosting solar presence in the country, we are moving towards an expedited growth in the renewable energy sector, especially for domestic manufacturers. We are looking forward to play a role in helping the country move towards a sustainable future of renewable energy security. Especially, with the smart city initiative embracing rooftop solar, we at Waaree Energies are ready to deliver.
Moreover, with the elimination of customs duty on solar tempered glass, manufacturing solar panels will become relatively cheaper. Being a leading energy company, we are also looking forward to help the Government fulfill its ambitious goal of providing free electricity to 4 crore rural households, in addition to creating more employment opportunities as part of the Indian manufacturing sector.
We also applaud the Government for coming in acknowledging the role of MSMEs with the announcement of the reduced rate of 25 per cent for companies with a turnover of up to Rs.250 crore in 201617. We hope this results in increase of skill development, and adaptation of new technologies and innovations across industries.
—Dr Hitesh Doshi, Chairman and Managing Director, Waaree Group
Budget with people in focus
It is a people-focus budget. When our honourable finance minister Arun Jaitley announced the series of measures in Budget 2018-19 to promote clean energy, access to power and energy security, we as a company are looking forward about its future scope.
EAPL would be supporting Mr Jaitley’s initiative of full electrification on providing electricity connection to nearly 4 crore poor households under Sobhagya Yojana. Also, with the announcement of promoting electric vehicles, centre may lower GST and pass benefits to buyers, will give a major impetus to the shift to clean energy.
However, in the renewable energy sector there are number of policy decisions related to import duties and domestic manufacturing, which needed to be addressed to further boost the sector. Also, achieving the target of 175 GW of renewable energy capacity and generating it by 2022 requires a lot more to be done than simply increasing the budgetary allocation.
—Shekhar Singal, Managing Director, Eastman Auto & Power Ltd
Railway electrification gets propulsion
Hartek Group, with its power sector expertise, is well placed to support railway electrification and modernisation for which Government of India has announced CAPEX allocation of Rs.1.48 lakh crore. With an expertise in providing complete EPC solutions, we are positive towards finding opportunities in this domain and being an active part of the country’s growth story this year.
Also with 99 cities selected and an outlay of Rs 2.04 lakh crore allocated under the Smart City Mission, requirement of Smart Grids will increase as these are essential to support seamless power infrastructure for different Smart City functions. Hartek Group looks forward to playing an important role in realisation of this mission.
—Hartek Singh, CMD, Hartek Group
Budget furthers ‘Access to Energy’
A cornerstone of the Budget 2018 is to further the access to energy agenda to the marginal section of the population. Enhancement of the ‘Ujjawala’ scheme to provide free LPG gas connections to 80 million women, reiteration of commitment under ‘Saubhagya’ scheme to electrify 40 million households and facilitation of farmers to set up distributed solar projects holds a greater promise for the currently unserved energy consumers. These schemes hold a potential to enhance energy demand greatly and thus may help bring the stranded capacity on-line. Access to financial markets for energy sector companies is likely to be kick-started by facilitating investment by long term savings based institutional investors through measures announced for kick starting the bond markets in India. Smaller companies particularly in distributed energy space with turnover below Rs.250 crore will benefit by a lower tax rate. Mention of CPSE InvITs increase the hopes of power sector PSUs being able to access market to raise equity capital in an innovative manner.
—Manish Aggarwal, Partner, Head- Corporate Finance – M&A, Debt Advisory – Infrastructure, Head – Energy and Natural Resources, KPMG in India
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