Union Budget 2021-22 had some key policy announcements for the power sector aimed at expediting growth, with a Rs 3,059 billion new reform scheme for the struggling power distribution segment. Here is a quick summary of the reactions of power sector leaders on the budget….
Sumant Sinha, CMD, ReNew Power
It is a growth-oriented and forward looking budget. The Finance Minister’s focus on healthcare, infrastructure, power and the financial sector will have a positive, broad based impact on the economy. By increasing capex spending significantly without hiking taxes, and instead focusing on expanding economic activity, the FM has set the groundwork for a sharp and sustained economic recovery over the next several years.
Sanjay Banga, President,T&D, Tata Power
Tata Power welcomes the step announced today for the distribution sector reforms as most of the discoms are reeling under huge losses, and finding it difficult to provide uninterrupted power supply. We also welcome the scheduled discussion on the Electricity Amendment Act 2021 during the ongoing budget session as when implemented in its true letter and spirit, the Act will provide the much needed independence to the regulatory mechanism for an effective and timely decision making. It will also pave the way for a speedier implementation of the National Tariff Policy, a must for the tariff rationalisation across all segments of consumers. This is very crucial for an overall industrial development for realization of Atmanirbhar Bharat. Besides the above, for the revival of the power sector the Government should use announced funds to provide transitional support to state governments who want to initiate distribution reforms by involving private sectors players.
Kush S., CEO, Essar Power
We would like to thank the government for giving due emphasis to the power sector in this year’s Budget 2021. In a highly anticipated move our Honourable FM announced a Rs 3,05,984 crore scheme to reform the power distribution sector in the country. T&D losses have plagued the power sector for a number of years and this scheme will surely help reduce losses and improve efficiency of distribution companies. The proposed amendments and Electricity (Amendment) Bill, 2021 with measures such as de-licensing of the power distribution business to bring in competition is a very consumer centric move which aims at creating a level playing field for all distribution companies. The Rs 1,000 crore grant for the growth of the solar energy sector and Rs 1,500 crore to the renewable energy sector is also a welcome move and will help the country in achieving the ambitious target of 175 GW of renewable energy capacity by the year 2022. These measures and reforms will definitely help improve the health of the sector and enhance growth in the coming few years.
Ratul Puri, Chairman, Hindustan Power
The thrust of the budget is on reviving the economy. It is positive and refreshing in its scope and scale. All the announcements are forward looking and will put India back on the growth trajectory. The announcement of a Rs 3.05 trillion package for discoms is encouraging and will reform the ailing power distribution sector. Prime Minister Narendra Modi government’s focus on improving financial health of state power utilities will ensure consumers get more choices as it will promote competition, reliable power supplies and make sector attractive to foreign investors, besides giving overall boost to the industry.The Budget has also given a boost to non-conventional energy sector by allocating Rs 1,000 crore to the solar energy corporation and Rs 1,500 crores to renewable energy development agency. It is a welcome move.
S.N. Goel, Chairman, Indian Energy Exchange Limited
A very heartening set of announcements by the Hon’ble Finance Minister to re-energise the country’s economy as well as building a sustainable energy sector. The proposed Rs 3 trillion distribution reform package to promote competition, consumer choice and increase penetration of automation and technology will go a long way in restoring financial viability and infusing greater efficiency in the sector. The power markets have a huge role to play here. Further, the announcement regarding creating an Independent System Operator to provide non-discriminatory open access to the national gas pipeline network will help to foster development of the gas markets. While the fine print and details of the budget are awaited, the announcements are forward looking & if implemented in true earnest can potentially transform the energy sector.
Prabhajit Kumar Sarkar, MD and CEO, Power Exchange India Limited
The Union Budget for 2021-22 presented by the Finance Minister Nirmala Sitharaman today, has given a big push to the power sector by announcing close to Rs 3.06 lakh crore power distribution sector scheme. We welcome this move as it is expected to assist discoms for infrastructure creation tied to financial improvements, including prepaid smart metering, feeder separation and upgradation of systems. Additionally, the government’s proposed framework to give consumers more than one discom choice was a much-needed move. It will help to enhance efficiency in the power distribution sector, induce fair competition and address the monopoly business of discoms. Besides, we foresee that reforms such as Rs. 1,500 crore allocation for the renewable energy sector, 100% Railway electrification and expansion of metro rail networks and hydrogen energy mission for generating hydrogen out of green-powered sources will contribute significantly in enhancing the country’s power demand. PXIL, as a national power market infrastructure institution welcomes the budget announcement and is ready to provide an efficient platform for enhanced volume of trading and efficient electricity price discovery in the country.
Tulsi Tanti, Chairman, Suzlon Group
I am particularly inspired by the Union Budget presented by our FM today. It has the right set of priorities and initiatives required to stimulate our nation’s economy post the COVID 19 crisis. The budget is bold and focusses on the basic drivers of our economy. Focus on infrastructure, power sector and renewable energy is particularly encouraging, however, there is ample impetus for healthcare and Aatmanirbhar Bharat. I am also delighted to see that the government is focusing on Inclusive Development, Innovation and Human Capital which is going to build the new India of our dreams. This is a very comprehensive budget and there is enough in this budget for all sections of the industry and society. The stimulus for the MSMEs will help build the foundation of a strong domestic economy. It is rare to see such a wide range of coverage in the Union budget and I congratulate the Finance Minister and the Government of India for the same. I am sure this budget will go a long way in building a sustainable and strong India.
Mahesh Palashikar, President and CEO, GE-South Asia
I would like to congratulate the Hon. Finance Minister on presenting a growth-oriented budget that has a significant thrust on increasing capex towards developing infrastructure. The expenditure on infrastructure will, in turn strengthen manufacturing for domestic and export markets. The introduction of integrated public health labs and increase of 137% in budget outlay for Healthcare sector are key steps. For the power and renewables sector, the announcement of the hydrogen energy mission as well as enabling electricity connections portability to consumers further demonstrate India’s commitment to renewable energy and technology interventions that can make power generation and distribution more efficient and cost effective. Another positive is the allocation for National Research Foundation aimed at promoting local innovation. Overall, the Budget has provided a strong foundation for long-term sustained economic recovery
Vimal Kejriwal, Managing Director and CEO, KEC International Limited
Budget 2021 is a budget for an Aatmanirbhar Bharat; a forward-looking budget focusing on construction and capex-led economic recovery. Significant allocation towards creating a future-ready Railway system, 100% Railway Electrification by 2023, focus on DFCs and Urban Infra, including new Metro projects and emerging technologies, infra creation for Power Distribution companies, expansion of Gas Distribution network to 100 new cities, thrust on Renewables, developing one lakh Digital Villages through BharatNet, and the creation of a Development Financial Institution for infrastructure financing augurs well for KEC International.