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.

Finance minister Chidambaram fulfilled the government’s commitment which is also strategic for the region. The transmission link line would pass through Kargil, Drass, Khalsi, which would also improve the power scenario in the region. The ministers and the state government in the region now have an onerous task to fulfill the strategic demand. The minister candidly said that planned expenditure in the next fiscal would be 29.4% higher than the current year, and elaborated, “I have provided sufficient funds to all ministries and departments, now it is up to the ministers to use these funds properly.'

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. The installation work was halted during the current fiscal due to paucity of incentives and fund.

Similar sops are also required for hydro electricity and solar power generation. The former is intrigued by political ill-will, while the latter is still suffering myopia of vision by the private players. With the relevant ideas in the Economic Survey, the questions have assumed higher dimension.

Let us a take a sharp look at the scenario. The Economic Survey this year acknowledges that the “Resources currently allocated to energy supply are not sufficient for narrowing the gap between energy needs and energy availability.” Strangely, when the thermal power segment has been staggering for last few decades, due to non-supply of adequate volume of coal for various reasons, the PPP and Bhagidari models could have been prioritised to develop the alternate energy sources.

Currently the power sector looks at the solar energy as a non-viable power for the masses. The generation activity has been adversely affected by high cost of production of electricity for consumers, mainly because the photo-voltaic solar modules (PVS), so important to tap sun rays and transform them into electricity, are imported. There are not enough facilities made available within the country.

During the last three Five-Plan Plan years, setting up of manufacturing units of the PVS modules were not prioritized, even as the Rajiv Gandhi Solar Mission has been envisioned.

Given incentives like bonds or shares, the PPP and Bhagidari models, setting up of manufacturing of the PVS modules within the country is not an impossibility.

In the latest Budget also, the task has been by and large overloked by mere passing the buck to the MNRE’s discretion. Funds cannot be a problem for setting up PVS manufacturing units, it is the political will which is. (IPA Service)