Millennium Post

FM’s 2013-14 budget lacks power punch!

The long-term approach is still left to be done in the sector. The government’s vision about energy, it seems, is impeded by a slow growth rate of the economy, even as it also is troubled by the needs for more revenue generation.

The deficit Budget, therefore, could not provide for boosting production of the solar, nuclear and other alternate energies. Alike the previous years, the thought of power sector began with coal and ended with the coal only. The difference is, this time and for the first time, the CIL has been offered a PPP model support to boost its production and perhaps the capacity development of washeries.

Evidently the finance minister was driven by NTPC-bolstered pressures exuded by the power ministry. At an interview NTPC CMD Arup Roy Choudhury conceded to the untold assumption that the Budget has covered some aspects of power and infrastructure sector, following the policy advocacy by the power minister, Jyotiraditya Scindia. Allocation for the most contentious issues - such as how to produce more quality coal from the existing mines to meet demand of the generators, how to keep promises of supplies ordained by the fuel supply agreements (FSAs), how to price the imported coal to avoid a overload of tariff to consumers, how to generate viable alternative energy through hydro, wind and solar power, whether or not allocate funds for bio-fuels - remains minimal this year.

The government has expressed its firm resolution of restructuring the discoms, and also moved to halt the realization under the section 80-IA of Income Tax Act for one more year. This has largely been welcomed by the sector as this will encourage setting up of new capacities. The minister has urged the state power ministries to speed up the financial restructuring plan to avail the sops faster, knowing fully well that the real bottleneck lies in the political will.

The issues in the power sector are the avoidable bottlenecks. Enough needs to be done to exploit in full the natural bounties this nation is endowed with.

The nation would exert a new thrust for a year on development of infrastructure and energy. The finance minister evidently has examined the domestic coal availability and supply situation and the need for growing imports of gross calorific value coal. The offered PPP model would become handy for disciplining both the production ventures and pricing mechanism of coal.

Pegging the possibility is also the budgetary allocation for construction of a power transmission link between Srinagar and Leh. The allocation of Rs 226 crore this year against the total estimated cost of 1,840 crore for the transmission link is quite encouraging in as much as the state would get for the first time in 65 years a sustaining power backup. This may temporarily exude a feel-good factor in renewable energy minister Farooq Abdullah.

The renewable energy has been given a morale booster through wind energy projects. From the Rs 800 crore provided to the ministry, the mention was rather blandly for construction of wind energy turbines.

Accepting the need for incentives for renewable energy sector, the finance minister has also offered generation-based incentives, and enough elbow-room for the MNRE to support and elicit efficiency of the private sector. Also the government would provide low-interest  loans to the National Clean Energy Fund and Indian Renewable Energy Development Agency for setting up projects. This is likely to resume wind turbine installation work in the next two years. (IPA)
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