Month: January 2023

Economic Survey 2023 | If additional reforms are undertaken India can grow beyond 7%, says CEA Nageswaran

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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“The recovery is complete”— that was the key message from the 371-page economic survey which was tabled in parliament a day ahead of union budget 2023.

The first economic survey since the start of the Russia-Ukraine war, highlighted that prudent assumptions in the last year’s budget provided a buffer to the government during global uncertainties.

The survey highlighted that India has moved on from its encounter with the pandemic and projected a real gross domestic product (GDP) growth of 7 percent in FY23.

The survey said that government was on track to achieve fiscal deficit target of 6.4 percent. It stressed that availability of fiscal space is paramount amidst global uncertainties.

The survey warned that “entrenched inflation” may prolong the monetary tightening cycle, keeping borrowing costs “higher for longer.”

Finance minister Nirmala Sitharaman will present the union budget 2023 tomorrow. This is will be the last full budget before the general elections in 2024. It shall also be the last budget presented in the current parliament building.

In an exclusive interview to CNBC-TV18, Chief Economic Advisor V Anantha Nageswaran said that if additional reforms are undertaken India can grow beyond 7 percent in the remaining decade. However he admitted that downside risks to the growth estimates are higher in the global context.

Below is the verbatim transcript of the interview.

Q: Let me start by talking to you about your growth projections, 7 percent for FY23, 6.5 percent for FY24 and nominal growth of 11 percent, that is higher than what market economist are factoring in. Most seem to be closer to 6 percent if not slightly lower, and nominal at about 10 percent. I know you have projected your growth accelerants, your growth magnets as the reason behind why you believe that we should get to 6.5 percent next year, and you are even ambitious enough to project 7 to 8 percent over the rest of the decade. What are you most confident about? And what is the single biggest risk factor global and domestic that could be the downside risk?

A: First of all, I did not predict 7 to 8 percent for the rest of the decade, I said if additional reforms are undertaken, it is possible to go beyond 7 percent. But I was more talking about a range of 6.50-7 rather than 6-6.50 percent. If you look at the IMF forecast released this morning, for 2023-2024, they talk about 6.1 percent. But there are many other agencies which are within this ballpark of between 6-6.50 percent.

Given the uncertainties we face, I think, few basis points of difference, these are in the context of GDP estimation, these are all not big differences. We also highlighted while stating our base case of 6.50 percent, that the downside risk is higher than the upside to that baseline estimate. And when we talked of entrenched inflation and tightening cycle could prolong that is something that we spoke in the global context.

Q: But if I were to ask you about the risk factors domestically, what is it that you would be most concerned about? One of the aspects that you have talked about in the survey is the current account deficit, at this point in time you believe that it’s manageable, but you also talk about the need to monitor that closely? What would you be watchful off?

A: So domestic context, I don’t see too many risks to growth. I also mentioned in my presentation that much of the risks or even almost all of the risks come from the global uncertainties we face both political and economic. And obviously, primarily, it stems from uncertainties with respect to the evolution of commodity prices, and also potential supply chain disruptions if the war intensifies, or some other developments happen. So in that sense, given the fact that even high frequency indicators with respect to India in the third quarter are still doing quite all right, my best assessment is that the risks to our growth estimate stem predominantly from global factors.

Also Read: Few years of meaningful nominal growth will ensure fiscal consolidation: CEA

Q: Let me address the issue of capex, and you have outlined in the survey how the center’s capex has increased from a long average of 1.7 percent of GDP between 2009 and 2020 to 2.5 percent of GDP at this point in time. In the survey, you also talk about incipient visible signs of private capital formation. In that context, do you believe the heavy lifting which the government has done so far on capex will have to continue or do you believe that we should possibly look at some sort of tapering there?

A: I think it is something that India has to do not on an either or basis, but on a and basis. That is, the investment requirements for us to move from a lower middle income to middle income category countries is to have investments coming both from the public and the private sector. So, given the economic cycle, one will dominate the other. For example, in the first decade, the private sector was willing to invest and invested quite a bit. And now, in the last several years, given the stress in the banking and non-banking system and in the corporate balance sheets, the government took on the mantle of driving public investments and creating infrastructure. So, I think whether these things moderate cyclically, or expand cyclically will depend on the context, but there is room for both to happen.

Q: You also suggests that we are starting to see private sector capex picking up and you believe that in a way that animal spirits that we have all been waiting for them to be unleashed, are possibly on the cusp of being unleashed. How confident do you feel on that on the back of the fact that we are seeing double-digit credit growth at this point in time? As well as the repairing that we have seen on both corporate balance sheets, as well as bank balance sheets, which you talk about extensively?

A: I pin my hopes on the fact that balance sheets are very important drivers and so are current profitability trends, and both of them are pretty robust for the corporate sector to invest and they have been investing. I mean, that is what we mentioned in the presentation and in the chapter as well, that investment rates were higher than they were in the first half of the last financial year. And there are signs that the foreign direct investment has also held up quite well.

We must understand that, despite the balance sheet improvement, the kind of immediate or instantaneous response on the investment front was held back because of global developments and shocks. And that is why I feel as and when the global shocks slowly recede or people get used to them and find ways of dealing with them or getting around them, then investment rates will start to pick up and we will begin to see them in the data.

Also Read: India is on the cusp of a growth boom last seen 20 years ago, says CEA | Economic Survey 2023

Q: I want to address the issue of fiscal consolidation and link that to the very first chapter which talks about how we have emerged from the pandemic and you believe that the recovery is now complete. In fact, that is the headline, as far as that chapter is concerned. Given the fact that we have emerged and are resilient, and we are now talking about a resurgence at this point in time, how important will it be for the government not to deviate from the fiscal glide path that has already been projected in the government?

A: There is no reason to believe that the government is deviating from the fiscal consolidation path and we will see the signs when we all see the budget tomorrow. But important point to note is that India’s public debt ratio hasn’t materially increased in the last 15-16 years as it has happened in advanced nations. And we also show in the survey in chapter three on the fiscal situation that few years of steady nominal GDP growth will cause a meaningful reduction in the fiscal deficit parameters. So yes, fiscal deficit consolidation is important, but more than the headline, what matters is the quality of government expenditure and that has improved quite a bit, both at the union government level and at the state government level. In the last several years, the share of capex has gone up, we have a chart on that the share of revenue expenditure has come down. And therefore, we need to work on both, on the quality front – I would say quality front is more important than the headline deficit ratios because India’s debt sustainability is not in serious doubt.

It is important to continue to make improvements in terms of efficiency gains from public expenditure, and also qualitatively improve them in terms of having creating more space for ourselves in terms of social welfare, spending, development, spending, etc. And that would come from some of the asset monetisation plans that the government has. But in general, given the demographic advantages we enjoy, and given the fact that India’s nominal growth by and large, except in the last few years, because of the pandemic, and before that, the balance sheet problems we faced nominal GDP growth has run ahead of the cost of borrowing for the sovereign. And that if it continues, as we expect, fiscal parameters will improve quite meaningfully in the years to come.

Q: I want to address one of the other aspects that you talk off and that I think is something that the Prime Minister also seem to allude to this morning when he said that the world will be watching India’s budget very closely. You talk about how India has presented itself as a credible investment destination for capital diversification. On that front, many steps have already been taken, whether it’s a 15 percent concessional tax rate for new manufacturing facilities, changes in customs duties, and so on and so forth. How much work do you believe has already meaningfully been done? And how much work do you believe is still needed to be done to ensure that we truly realise this potential?

A: No, these will always be work in progress, you address some issues, new issues will crop up and new sectors will want their issues to be addressed. So there is never a time when we can say we have done everything and there’s nothing more left to be done, that would actually be a sign of concern.

Having said that, the way to assess any policy performance is, what is the marginal development? What is the incremental change at the margin, and from that perspective, we must say that lot has been done to attract investments, to signal government’s intent in creating a supply chain network to plug India into it, and inviting expressions of interest from private sector across the world with respect to the PLI schemes or for that matter on foreign direct investment, putting most of them into automatic route etc. So ultimately, of course, all of us will argue that the proof of the pudding is in the eating. But we forget that in economics, a key phrase is ceteris paribus. Even as government takes actions, the situation never remains the same, there are other shocks that come in the way that delay the onset of the impact and that is what we have been facing. But as far as we are concerned, the efforts are continuously being taken. And at some point, we will begin to see and we are seeing – if you look at the numbers, we have presented, foreign direct investment to GDP ratio has stepped up and absolute dollar amounts that are coming into the country in terms of foreign direct investment, have also shifted a level higher, in spite of the fact that the GDP numbers themselves have been growing. So I think we are on the right track. But there is no question that this is always a work in progress, and shall remain so.

Also Read: NITI Aayog’s Suman Bery believes growth forecast of 6.5% is feasible

Q: What has been the challenge of being able to put this survey together? It is the first survey that you have authored, what has been the most interesting aspect of being able to put it together? And what’s been the big challenge of putting it together as well.

A: I always told my colleagues that we are not putting together a survey, but we have to put together an annual economic story behind it. And that is an important challenge. And ultimately also we have to make sure that everything is backed up by evidence as much as possible. And of course, writing is a skill that comes with practice.

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GST collection soars to second highest ever with Rs 1.55 lakh crore in January

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The GST collection in January surged to over Rs 1.55 lakh crore, the second highest-ever mop-up, the finance ministry said on Tuesday.

“The gross GST revenue collected in the month of January 2023 till 5:00 PM on 31.01.2023 is Rs 1,55,922 crore of which CGST is Rs 28,963 crore, SGST is Rs 36,730 crore, IGST is Rs 79,599 crore (including Rs 37,118 crore collected on import of goods) and cess is Rs 10,630 crore (including Rs  768 crore collected on import of goods),” the ministry said in a statement.

The revenues in the current financial year up to January 2023 are 24 percent higher than the GST revenues during the same period last year.

This is for the third time, in the current financial year, GST collection has crossed Rs 1.50 lakh crore mark. The GST collection in January 2023 is the second highest next only to the Rs 1.68 lakh crore gross mop-up reported in April 2022.

“Over the last year, various efforts have been made to increase the tax base and improve compliance. The percentage of filing of GST returns (GSTR-3B) and of the statement of invoices (GSTR-1), till the end of the month, has improved significantly over years,” the ministry said.

In the October-December 2022 quarter, a total of 2.42 crore GST returns were filed till the end of the next month compared to 2.19 crore in the same quarter of the last year. This is due to various policy changes introduced during the year to improve compliance, it added.

Also read: Eco Survey calls for continued fiscal stimulus through reforms and higher investment

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Eco Survey calls for continued fiscal stimulus through reforms and higher investment

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The 2023 Economic Survey has leaned in favour of the Centre sticking to the fiscal glide path set out so far. It says being fiscally prudent will “ensure more significant fiscal space for policy action in uncertain times .”

The Survey observes that sticking to fiscal glide path will bring interest rates down and ultimately will lower the cost of capital for sectors across the board and put more money in the hands of people.

The survey said that, “in reality, fiscal discipline translates into a fiscal stimulus for all sections of the economy through lower interest rates.”

According to the survey, “as governments make their fiscal situations sustainable and stick to that path, the risk premium embedded in their interest rates comes down, thus lowering the cost of capital for all sections of society – on their educational loans, housing loans, car loans and business loans – and putting more money in their hands.”

The Survey also makes a strong pitch for Centre to keep incentivising states on capex. It says , “The Centre should continue incentivising the States for reforms and higher capital spending to ensure a stronger General government.”

The capex-led growth strategy will ensure sustainable debt levels in the medium term, the Survey observes.

Also read: India is on the cusp of a growth boom last seen 20 years ago, says CEA | Economic Survey 2023

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Economic Survey optimistic, but need to raise private capex, says industry

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Economic Survey 2023 is quite optimistic despite the global challenges that persist for the economy, said experts after the financial document was presented a day before the Union Budget in a Special Show on Economic Survey 2023 on CNBC-TV18.

Soumya Kanti Ghosh, Group CEA, SBI, noted that the Survey is betting on the possibility of certain factors being favourable in the coming year as against last year.

“Yes, the survey is a little bit optimistic but my sense is that the survey is actually banging on the hope that next year the factors will be far more good active than what they have been last year. Inflation is likely to cool down significantly. Our exports and goods and services in April November has expanded by 16%. The external factors which are very unfavorable this year could turn more favorable,” he said.

Subhrakant Panda, President, FICCI, MD, IMFA, stressed on the need for private sector to increase capital expenditure in projects.

“The government has done a great job of providing both stimulus to the economy during the lean period of the pandemic as well as doing so by investing in infrastructure which has a significant impact going ahead on both the ease of doing business as well as the, as the cost of doing business,” he said.

“But clearly private sector does have to step in. There has been a steady increase quarter on quarter in terms of public, private sector announcements of new projects. Generally I think private sector capital private sector capital expenditure is showing signs of picking up. It’s more than a trickle. I believe it is gathering momentum and going ahead while this will be the year where there is a transition from substantially government led capex to private sector,” Panda said.

Dr Anish Shah, Vice President, FICCI & Managing Director & CEO, Mahindra & Mahindra, reiterated the fact that the survey was a very optimistic one.

“It (Survey) also gives certain very specific magnets growth and these are real because India is positioned very well in the world today. And if you look at a specific number on the survey, our core debt to GDP is down 9% since 2008. This compares to the global average which is up 38%,” he said.

He too stressed on the need for the private sector to step up capacity to create a position of strength not just for India but for the world.

Highlighting the optimism in the Survey, Sanjiv Puri, Vice President, CII Chairman & MD, ITC, said that the enablers have been articulated and the confidence of business leaders has jumped significantly.

He appreciated the government’s initiatives has helped strengthen the economy and that the agriculture sector has been resilient.

Appreciating the lower debt in the Survey, Janmejaya Sinha, CMD – BCG, India, Chairman – Financial Inclusion, CII, stressed on the need to use money judiciously.

“I feel that there is a lot of money that is available which this government can now actually cash in on.

And we have been doing that, you know, we’ve been building roads, we’ve been building on the lane, you know,

“When we build infrastructure, we improve long term productivity and for us to borrow. If we use the borrowing to improve our productivity, (that) is the only way we get out from being an emerging country to building it,” he said.

Also read: Economic Survey 2023: Education GER, infrastructure on a rise but data suggests scope for improvement

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MakeMyTrip posts Q3 profit at $0.2 million

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Travel service provider MakeMyTrip Ltd on Tuesday reported a profit of $0.2 million in the third quarter ended December 2022.

The NASDAQ-listed firm had posted a loss of $9 million in the year-ago period, it said in a statement.

Also Read: Coal India Q3 net profit jumps 69 percent in a ‘historic high’

In the third quarter gross bookings grew by 64.4 percent in constant currency year-on-year to $1.74 billion, the highest-ever in the company’s history, it added.

“Positive consumer sentiment and peak seasonality on the back of festivals and holidays led to improved travel demand during this quarter. As a result, we recorded our highest-ever quarterly gross bookings and adjusted operating profit,” MakeMyTrip Group CEO Rajesh Magow said.

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A rare ‘green comet’ will be closest to Earth today | When and where to watch in India

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Space enthusiasts are especially excited today because of the appearance of a rare comet. The ‘green comet,’ officially designated C/2022 E3, will be at its closest proximity to Earth on Wednesday and Thursday after reportedly having last been in the vicinity of our planet 50,000 years ago. The bright green glow of this celestial object will be visible to the naked eye, although using binoculars or a telescope is advised for a better view. 

Here’s everything we know about the comet and when people in India can spot it.

Discovery

According to The Guardian, astronomers at California’s Zwicky Transient Facility discovered a comet, dubbed ‘the green comet’ due to its hue, in March 2022. It is believed to have originated from the Oort cloud, a collection of icy bodies located in the furthest reaches of the solar system.

What caused the green glow

Scientists believe that the interaction of sunlight and diatomic carbon causes the green glow around this comet. Diatomic carbon is a type of gas made of two carbon atoms bonded together. It forms on the head of the comet when sunlight breaks down larger carbon substances.

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When ultraviolet light from the sun excites the diatomic carbon, it gives off light, creating a green coma (nebulous halo) around the comet’s nucleus. However, the ultraviolet light also causes the diatomic carbon to break down, which is why the comet’s tail is not green.

Last seen

C/2022 E3 is not as frequent a visitor as others of its kind — think Halley’s Comet that appears every 76 years. The last time C/2022 E3 (ZTF) could have been visible from Earth was during the stone age, an era when the Neanderthals were still around.

When, where and how to spot it?

Some observers have reportedly spotted C/2022 E3 without equipment after the moon set. Given the pollution and artificial lights, people are advised to go to a dark, pollution-free location to spot the green comet. During its closest approach on Wednesday and Thursday (February 1 and 2), C/2022 E3 will be at a distance of 42 million km from Earth.

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In India, the celestial body will be visible to people in Ladakh, Odisha, West Bengal, and some Northeastern states on Wednesday.

According to India Today, stargazers in India can view C/2022 E3 in the skies after 9.30 pm with clear sky conditions and darkness. To locate the comet, look south from the Pole Star, and it should be visible as a greenish tinge. The comet will move south and reach the head of the Orion constellation.

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RBI relaxes restrictions on SBM Bank (India) till March 15

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Reserve Bank of India (RBI) on Tuesday relaxed the restrictions on SBM Bank (India) and allowed ATM/POS transactions under Liberalised Remittance Scheme (LRS) till March 15.

The banking regulator, on January 23, asked SBM Bank (India) to stop with immediate effect all transactions under the Liberalised Remittance Scheme (LRS) till further orders.

“The bank has since initiated corrective actions and made submission for relaxation of the restrictions,” the RBI said.

Based on the submission and also to provide relief to the affected customers of the bank, it has been decided to partially relax the restrictions by allowing ATM/POS transactions under LRS through KYC-compliant internationally active debit cards issued by the bank, it said.

“The relaxation is up to March 15, 2023, or until further orders, whichever is earlier,” the RBI added.

An SBM Bank (India) spokesperson in a statement said the RBI has permitted the bank’s customers (KYC-compliant accounts) to use their debit cards for physical purchase at merchant outlet and ATM cash withdrawal overseas till March 15, 2023.

“We wish to iterate that our intent has always been to work toward the customers’ interest and stay committed to upholding the highest standard of banking,” the spokesperson said.

However, international e-commerce/online transaction continues to be blocked till further notice, the bank added.

Under the Liberalised Remittance Scheme, Indian residents, including minors, are allowed to freely remit up to USD 2,50,000 per financial year (April-March) for any permissible current or capital account transaction or a combination of both.

In December 2018, the RBI sanctioned the Scheme of amalgamation of the entire undertaking of SBM Bank (Mauritius) Limited, India with SBM Bank (India) Limited which was granted a licence to carry on the business of banking in India through a wholly-owned subsidiary.

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Tesco cost cutting overhaul puts 2,000 jobs at risk

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Tesco Plc is eliminating hundreds of manager roles across its stores and closing all remaining food counters and hot delis as the UK’s biggest supermarket operator seeks to cut costs.

The grocer is introducing shift leader roles into its larger stores, allowing it to cull 1,750 other management positions. Tesco said Tuesday it will also shut its food counters and hot delis from Feb. 26 as shopper interest wanes, with most consumers preferring to buy packaged products in the aisles.

At a more local level, the supermarket chain is planning to close eight pharmacies, move overnight roles to daytime in some stores and reduce hours in some of its post offices. Tesco is also cutting some roles in its head office in Welwyn and closing a maintenance base in Milton Keynes. All those measures will impact about 350 employees, who will be offered alternative roles.

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The fresh round of job cuts comes as supermarkets’ margins are under pressure from rising inflation and the effort to keep prices down to protect market share. British shoppers are increasingly opting to visit the German discounters Aldi and Lidl which have a more simplified, budget offering.

Last week Asda, Britain’s third-biggest grocer, said it’s planning measures across its stores to save costs. The chain plans to cut night shifts in favor of staff restocking shelves during late evening or daylight hours. The company is also reducing hours for its post offices and closing a small number of pharmacies.

J Sainsbury Plc is losing its drug counters too as LloydsPharmacy has decided to close in 237 stores.

Tesco is attempting to keep prices down and raise employee pay as the worst UK inflation in four decades weighs on the business. The chain expects retail adjusted operating profit to fall slightly this year to between £2.4 billion ($3 billion) and £2.5 billion.

Also read: Kantar India Union Budget survey: Rising inflation, fear of job loss top concerns for Indians

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Coal India Q3 net profit jumps 69 percent in a ‘historic high’

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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State-owned Coal India Ltd (CIL) on Tuesday, January 31, reported a 69 percent year-on-year (YoY) jump in profit after tax at Rs Rs 7,719 crore crore for the third quarter ended December 31, 2022, on the back of higher sales.

In the corresponding quarter last year, the company posted a net profit of Rs 4,557 crore. The consolidated sales of the company during the October-December period increased to Rs 32,429.46 crore, over Rs 25,990.97 crore a year ago.

In a statement, the PSU said the steep rise in profit came on the back of higher add-on over the notified price in e-auction sales of 14.65 million tonnes coal during the third quarter of FY23.

Also Read: Indian Oil Q3 Result: Petchem segment losses widen even as profitability returns

Though auction volumes were lower by 44 percent in the third quarter of current fiscal, compared to 26 million tonnes of similar quarter FY22, higher premiums under the e-window helped CIL in cranking up sales by Rs 2,341 crore.

The realisation per tonne of coal was Rs 5,046 under auction segment, in the third quarter against Rs 1,947 per tonne for comparable quarter in FY22. The jump was Rs 3,099 per tonne or 159 percent.

“CIL’s post tax profit during Q3 of the ongoing fiscal rose sharply to Rs 7,719 crore clocking a robust 69 percent growth. This is also a historic high for this period in any year till now. For the comparable quarter of FY22 CIL’s PAT was Rs 4,557 crore,” the firm said.

Sales volume of 158 million tonnes and better average realisation under the fuel supply agreement (FSA) resulted in a net impact of around Rs 3,580 crore. FSA sale increased by 13.2 million tonnes in the December quarter over 144.6 million tonnes.

Also Read: L&T Q3 Result: Exceptional item aids profit, high costs keep margin under pressure

Realisation per tonne of coal under FSA category was Rs 1,482 in the October-December period of FY23, an increase of 8.2 per cent compared to Rs 1,370 per tonne of FY22.

The company’s net sales were up 25 percent at Rs 32,429 crore compared to Rs 25,991 crore of the third quarter of previous financial year. Its board gave approval for the payment of second interim dividend of Rs 5.25 per share.

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Will Budget 2023 successfully power India’s renewable sector

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The installed renewable energy capacity in India has grown at 118 percent between 2014 and 2022, and it stands at 166.4 gigawatt (GW). Despite this exponential growth in the previous decade, India is still far away from its 2030 target of achieving 500 GW of renewable energy or 50 percent of its total installed power capacity. The tall target set by India for itself boils down to adding approximately 50 GW each year.

Solar holds the largest share of over 36 percent out of the total installed renewable energy capacity in India. Large and small hydro projects form 31 percent of the total capacity, whereas wind energy takes a smaller share of 25 percent.

Government policies coupled with deflation in prices of raw materials have helped the solar sector increase its capacity by 18 times in the last seven years. The Indian government knows that if India wants to become Atma Nirbhar in its energy requirements then solar energy will become the most crucial piece in the puzzle.

The government has backed its plans with swift action, so far. An installed solar capacity of over 60 GW has been an outcome of the government’s policies, which include the accelerated depreciation scheme, long-term power purchase agreements, waiver of inter-state transmission charges, generation-based and other tax incentives. The government has also announced a Rs 19,500 crore production-linked incentive or PLI Scheme in the solar module manufacturing sector along with phase 2 of a dedicated green energy corridor.

Hetal Gandhi, Lead-Energy Transition at CRISIL, said the launch of the 500 GW programme by the government is giving direction to the renewable energy sector. Focus on distribution especially the Revamped Distribution Sector Scheme (RDSS), ensuring timely payments, having specific allocations for the hydro energy sector, are steps which are moving the industry towards green energy exposure. Gandhi expects India to have solar and wind energy installations of 111 GW by the FY23-end. According to her, the pace of capacity addition is expected to continue to 275-300 GW by 2030.

Sumant Sinha, CMD at ReNew Power, said the government has been proactive on bringing policies to incentivise the sector for further growth. According to Sinha, the tax benefit which infrastructure companies have enjoyed is expiring soon and needs to be extended. He also said that a higher allocation towards some PLI schemes, especially in the solar sector, and more expenditure towards the green hydrogen space would be very important in the coming days.

Also Read: Green Hydrogen Mission: Government to decide on fixing standards for Green Hydrogen, ensure uniformity with global definitions

Shadab Shaikh, Chief Technical Officer at GoMumbai Solar, said that the solar industry seeks a differential rate of interest for itself which will help the industry achieve India’s renewable energy target.

The complementarity of solar and wind resources provides an opportunity to make the two technologies hybrid and make optimum use of infrastructure, including land and transmission systems. The Centre has now released tenders for renewable energy auctions for round-the-clock and hybrid projects instead of plain solar or wind tenders. But what else is in store for the wind energy sector?

According Sumant Sinha of ReNew Power, the industry requires combined and a round-the-clock solution helping them put the power generated into the grid easily. According to Sinha, hybrid projects are an innovative strategy which also help discoms absorb the power generated.

Offshore wind energy is at a relatively nascent stage but offers a very large opportunity. India has set an offshore wind power capacity target of 30 GW by 2030. Adding offshore wind to India’s power generation mix will provide the much needed diversification, but experts believe the government must look at the supply chain and address policy related bottlenecks.

Hetal Gandhi of CRISIL believes that the Centre needs to make its stand clear on how it wants to bring a balance between off-shore and on-shore wind energy. According to Gandhi, off-shore wind energy provides a large opportunity but the tariff gap between off-shore and on-shore needs to come down.

India also plans to integrate large-scale solar and wind energy into its grid by 2030. In this context, battery storage is a vital technology solution. The International Energy Agency’s (IEA) India Energy Outlook 2021 predicts that the country will add 140-200 GW of battery storage capacity by 2040 — the largest for any country. To achieve this target, India will need a lot more than the recently-announced Rs 18,000 crore rupee PLI scheme

Sumant Sinha of ReNew Power said that batteries are an important part of absorbing more energy into the grid. According to Sinha, the industry has asked the government to bring customs duty and GST on batteries down so that installation can become much more widespread.

The latest addition to India’s green energy bouquet has been hydrogen. Green hydrogen is a prime source of non-polluting energy having the highest output by weight and volume. If nurtured right, green hydrogen can become the fuel which will drive the green energy revolution. A step in this direction has been the announcement of the National Green Hydrogen Mission. The initial outlay for the mission has been $2.5 billion, including an outlay of $2.2 billion for the Strategic Interventions for Green Hydrogen Transition (SIGHT) Programme —$150 million for pilot projects, $50 million for R&D and $50 million for other components. Investment commitments to the tune of $125 billion have been received from Adani Enterprises and Reliance Industries, so far.

Sumant Sinha of ReNew Power said they will look forward to further investments in the Green Hydrogen Mission. The government target is to produce 5 MT of green hydrogen by 2030 and according to Sinha, an investment of nearly $200 billion would be required to achieve that target.

India’s vision to increase its share of non-fossil fuel energy to 50 percent by 2030 will depend on how the government’s reforms shape up. Another factor would be how effectively the industry can mobilise investments. A Bloomberg estimate suggests that India would need $223 billion between 2022 to 2029 towards just the wind and solar sector. Large Indian corporations have so far shown some strong financial commitments but execution will be key as well will the ability to attract more money — domestic and foreign.

Also Read: India is going big with solar energy, but it is time to focus on its waste too

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow