Environment-friendly plans do not go far enough for those in business

Mumbai: The Indian Budget 2010 has given greater emphasis on clean and renewable energy. This has been welcomed by environmentalists but those in the business of providing solar energy feel the government has to go an extra length to meet its ambitious targets.

In order to reduce dependence on fossil fuels to combat global warming and climate change, Finance Minister Pranab Mukherjee yesterday proposed to levy an energy tax on coal produced in India and imported coal at a nominal rate of Rs50 per tonne.

He said, "In pursuance of the government's resolve to implement the National Solar Mission, I propose to provide a concessional customs duty of 5 per cent to machines, instruments, equipment and appliances, etc required for the initial setting up of photovoltaic and solar thermal power generating units. I also propose to exempt them from central excise duty. Similarly, ground source heat pumps used to tap geo-thermal energy would be exempt from basic customs duty and special additional duty."

With an ambitious target of 20,000 megawatts of solar power by 2022 set under the Mission, the finance minister has increased the plan outlay for the Ministry of New and Renewable Energy by 61 per cent from Rs6.2 billion in 2009-10 to Rs10 billion in 2010-11.

Environmentalist Rishi Aggarwal of Mangrove Society of India says, "The budget obviously shows traits of progressiveness towards the environment. How much of it will be implemented has to be seen."

A representative of a Mumbai-based company involved in the business of setting up solar power plants in the country says that an absolute duty and tax-free regime would be ideal to reduce costs and increase supply.

Aggarwal, too, says, "As of now, solar energy is far too expensive for individual home owners and small factories."

He has welcomed Special Golden Jubilee Package for Goa in the budget which allocates Rs2 billion to restore Goa's beaches which are prone to erosion and increase its green cover through sustainable forestry.

Also proposed is a solar, small hydro and micro power projects at a cost of Rs50 billion for the Ladakh region of Jammu and Kashmir which has an extremely harsh climate and suffers from energy deficiency.

In a boost to create a cleaner environment, the minister has also proposed to promote wind energy, LED lights for streets, homes and offices and electric cars through reduction or exemption of duty.

The solar-powered cycle rickshaw or ‘solekshaw' will also enjoy an exemption from customs duty.

• Rs50: Energy tax on coal per tonne
• Rs10b: ministry budget for new and renewable energy