The budget should focus on renewables
India has continued its solar and wind energy journey by adding around 11 GW capacity in 2019. This growth can be further enhanced by addressing key barriers in the upcoming budget.
Renewable, like any other infrastructure business, is capital-intensive and availability of funds at a competitive price is an important ingredient for growth. While the RBI has brought down the repo rates periodically, it hasn't been translated to the banks passing on the benefit to the end customer. Add to this, the tight lending environment on liquidity front - there are a handful of financial institutions doing fresh project finance. This needs to change soon to uplift investment and confidence in the industry. Additionally, the removal of capping in the priority-sector lending limit for rooftop solar projects will ensure higher credit financing and give a much-needed boost to the sector.
The Government should also focus on implementing the amendments in the Electricity Act of 2003 with a focus on accelerating open access policies, privatisation of the DISCOMs and separating content & carriage, to address many of the challenges and inefficiencies prevalent within the power distribution sector. This will eventually reduce the energy cost burden on the end consumer and improve the financial health of the DISCOMs.
Further, a comprehensive Credit Guarantee Mechanism promoted by the Government or perhaps, a multilateral agency for MSMEs with a credit rating below 'A', would be a welcome step. This would throw open the rooftop solar market to a multitude of small businesses, creating a huge market and would also bring down electricity costs for these companies."
