Shri Piyush Goyal urged people to monitor ministry’s work to provide valuable feedback



Shri Piyush Goyal urged people to monitor ministry’s work to provide valuable feedback

Budget 2016-17 to have positive impact on Power, Coal & RE Sectors
Shri Piyush Goyal, Minister of State (IC) for Power, Coal and New & Renewable Energy, in a media briefing here today, urged people to monitor work of his ministries and to bring forth any deficiencies in working of system. The Minister said that the feedback from people help Government to work efficiently.

On the occasion, Shri Goyal felicitated Shri Dinesh Arora , ED, REC for achieving one-third of the rural electrification target, thereby electrifying more than 6000 villages across the country. He also felicitated Shri Venkatesh Diwedi GM, Technical, Energy Efficiency Services Limited ( EESL) for crossing distribution of 7 crore LED bulbs and thus contributing immensely in Government’s drive for energy efficiency. The Minister also launched GARV newsletter for rural electrification on the occasion.
While highlighting various budget proposals relating to Power, Coal & Renewable Energy sectors , Shri Piyush Goyal informed that the annual allocation for DDUGJY has been increased by 66% from Rs. 5100 crore (BE 2015-16) to Rs.8500 crore. This is a positive development making more funds available for improving distribution infrastructure. He said that assessee engaged in the business of transmission of power shall be allowed additional depreciation at the rate of 20% of actual cost of new machinery or plant acquired and installed in a previous year.  This will be beneficial for POWERGRID and other transmission companies and help increase transmission capacity at lower cost. “PFC and REC have been included in the list of organisations who would be allowed to raise bonds during  2016-17”, he added. Shri Goyal stated that a budget proposal will be incorporated in CST Act which will allow application of CST rate on inter-state transfer of gas for Gas based plants. The Minister also mentioned that the benefit of concessional custom and excise duty (proposed in budget) would be available to power generation projects based on municipal and urban waste. This will result in reduction in the cost of generation of power.
            Talking about Budget proposals of Coal Sector, Shri Piyush Goyal appreciated the increased coal production in the country. He informed that Coal India Limited has registered 9.2% growth in coal production in the duration of April 2015 to February 2016 in comparison to 8.25% growth registered during 2014-15. The Minister delightedly told that this is the highest coal production growth in over two decades. He also said that the basic Customs Duty on Heavy Earthmoving Machinery (HEMM), other than dumpers has now been proposed to be enhanced from 7.5% to 10% i.e. an increase of 2.5%.  The step is envisaged to help domestic manufacturers to support Make in India.
            Referring to Renewable Energy Sector, Shri Goyal said that the Budget 2016-17 has proposed to levy Clean Environment Cess at Rs.400 per tonne, which will be used for development of renewable energy resources and various environmental protection measures. He informed that Plan Outlay to support Renewable Energy has been increased from Rs. 2,509 Crore in 2014-15 to Rs. 4,246 Crore in 2015-16; and further to Rs. 5,000 Crore in 2016-17 budget. The Minister told that Budget 2016 has provisions to mobilize funds at cheaper rate to ensure availability of cheaper power to the ultimate consumers.
In his media interaction, Shri Goyal said reiterated that out of un-electrified villages, about 3000 villages to be electrified through renewable energy sources under the DDUJGY scheme. The budget also proposes 100% deduction of projects for 3 out of 5 years to Start-ups. It will encourage the entrepreneurs for rise startups in RE sector. A Special patent regime with 10% rate of tax on income from exploitation of patents is mentioned in the budget to give fill up to entrepreneurs to adoption of new technologies in RE sector. Shri Goyal said that solar pumps for irrigation and the pumps based on biomass likely to get the fill up in 28.5 lakh hectares which is to be brought under irrigation. He further stated that solar lamp being exempted from excise duty from 25% to NIL and Basic Custom duty on Industrial solar water heaters increased from 7.5% to 10%.
The brief details of Budget Proposals concerning Power, Coal & Renewable Energy Sectors  are as follows :
Highlights of the Budget 2016-17 – Ministry of Power
·         Increased allocation for DDUGJY and IPDS schemes. The annual allocation has been increased by 66% from Rs. 5100 crore (BE 2015-16) to Rs.8500 crore. This is a positive development making more funds available for improving distribution infrastructure.  Total Annual Plan outlay for the Ministry of Power has been increased from Rs. 6800 crore (BE 2015-16) to Rs. 12200 crore in BE  2016-17. This  increase is mainly due to enhancement in budget allocation for the above two schemes and for Power System Development fund (PSDF)  for which the allocation has been increased from Rs. 300 crore (BE –2015-16)  to Rs. 1900 crore (BE 2016-17).
·         Additional depreciation for transmission companies from FY18. [Section 32(1)(iia) of the IT Act]. Assessee engaged in the business of transmission of power shall also be allowed additional depreciation at the rate of 20% of actual cost of new machinery or plant acquired and installed in a previous year.  This will be beneficial for POWERGRID and other transmission companies and help increase transmission capacity at lower cost.
·         PFC and REC have been included in the list of organisations who would be allowed to raise bonds during  2016-17. This would provide additional resources for these two Power Financing Companies during the next financial year.
·         The Ministry is implementing a Scheme of Utilisation of Gas based power generation capacity which envisages provision of subsidy to DISCOMs to procure power from stranded and domestic gas based power plants. The Budget document proposes to amend Section 3 of the CST Act and seeks to insert an explanation  as under :
   ‘where the gas sold or purchased and transported through a common carrier pipeline or any other common transport distribution system becomes co-mingled and fungible with other gas in the pipeline for system and such gas is introduced into the pipeline or system in one state and taken out from the pipeline in another state, such sale or purchase of gas shall be deemed to be a movement of goods from one state to another’
This explanation proposed to be incorporated in the CST Act will obviate the need to issue separate notification by Centre/States  which is currently the case. This will be a contribution to procedural improvement.
      Valid agreement between importer / producer of power with urban local body for processing of municipal solid waste for not less than ten years from the date of commissioning of project” being provided as an alternative condition for availing concessional customs/excise duty benefits in case of power generation project based on municipal and urban waste.
Impact: The benefit of concessional custom and excise duty would be available to power generation projects based on municipal and urban waste. This will result in reduction in the cost of generation of power.
·         The Budget Speech in para 40, 41  and 81 appreciations work done in the area of Rural Electrification, transmission and generation and replacement of incandescent & CFL lighting with LED lighting by the Ministry of Power as:

40. As on 1st April, 2015, a total of 18,542 villages were not electrified. The Honourable Prime Minister, in his address to the Nation on 15th August, 2015 announced that the remaining villages will be electrified within the next 1000 days.
41. As on 23rd February, 2016, 5542 villages have been electrified. This is more than the total combined achievement of previous three years. The Government is committed to achieve 100% village electrification by 1st May, 2018…
81. In the other segments of the infrastructure sector, our Government has achieved the highest coal production growth in over two decades, highest ever capacity addition in generation, highest ever increase in transmission lines and in distribution of LED bulbs.
 Highlights of the Budget 2016-17 – Ministry of Coal
·         Clean Environment Cess :
The Budget 2016-17 has proposed to levy Clean Environment Cess at Rs.400 per tonne, which will be used for development of renewable energy resources, various environmental protection measures including Project Tiger, Wild Life Conservation and abatement of river pollution, etc.    
Though the proposed enhancement has a nominal impact 12 Paise per unit on power generation, it would however help in addressing critical environmental issues, particularly development of clean technologies and promoting wild life conservation, abatement of river pollution, etc.  which are of serious concern of the entire nation and nee dto be addressed on high priority.
When compared to this more the of Rs. 1,80,000 Crores under UDAY from 2019 onwards, this increase will be quite small.
·         Customs Duty on Heavy Earthmoving Machinery (HEMM) :
The basic Customs Duty on HEMM other than dumpers has now been proposed to be enhanced from 7.5% to 10% i.e. an increase of 2.5%.  This is envisaged to help the domestic manufacturers to support Make in India.
·         Highest coal production growth in over two decades :
Growth in all India coal production in 2014-15 :  8.25%
Growth in production from April, 2015 to February, 2016 :
CIL – 9.2 %;  SCCL – 18%
·         Basic Custom Duty (BCD) on Coal & lignite revised to 2.50% from 2.50% / 10%.
Impact: This will lead to reduction in the cost of lignite
Highlights of the Budget 2016-17: Ministry of New & Renewable Energy
      Plan Outlay to support Renewable Energy has been increased from Rs. 2,509 Crore in 2014-15 to Rs. 4,246 Crore in 2015-16; and further to Rs. 5,000 Crore in 2016-17 budget. This will help in implementation/ expansion of renewable energy programmes to reach the target of 175 GW by 2022.
      Clean Environment Cess will enhance the funds available for promoting renewable energy projects and the infrastructure associated with it.
      Inverted Duty Corrected
This correction will lead to reduction in the capital cost of the wind power equipments, which in turn will reduce the cost of generation of power from wind power projects.

Excise duty on carbon pultrusions used for manufacture of rotor blades, and intermediates, parts and sub-parts of rotor blades for wind operated electricity generators reduced from 12.50% to 6%.

      Cheaper funds to boost investment in renewables
o   Mobilisation of additional finances to the extent of Rs 31,300 crore by NHAI, PFC, REC, IREDA, NABARD and Inland Water Authority by raising Bonds.
o   Dedicated fund to provide credit enhancement to infrastructure projects by LIC. Renewable Energy projects may likely to get the share in the proposed dedicated fund.
o   Impact: It will help FIs to mobilise the funds at a cheaper rate which in turn will make the funds available for the development of the power sector particularly for projects of national importance and ensure availability of cheaper power to the ultimate consumers.

      Electrification of Villages:
As on 1st April, 2015, a total of 18,542 villages were not electrified. The Honourable Prime Minister, in his address to the Nation on 15th August,2015 announced that the remaining villages will be electrified within the next 1000 days .As on 23rd February, 2016, 5542 villages have been electrified.
Out of total un-electrified villages, about 3000 villages to be electrified through renewable energy sources which will enhance the demand for renewables.
      Boost to Start up India
100% deduction of projects for 3 out of 5 years to Start-ups      .It will encourage the entrepreneurs for rise startups in RE sector.

      Make in India
Special patent regime with 10% rate of tax on income from exploitation of patents. It will give fill up to entrepreneurs to adoption of new technologies in RE sector.

      Pradhan Mantri Krishi Sinchai Yojana – 28.5 lakh hectares will be brought under irrigation.           Solar pumps for irrigation and the pumps based on biomass likely to get the fill up due to this announcement.
      Make in India
  • Basic Custom duty on Industrial solar water heaters increased from 7.5% to 10%.  Imports likely to become costlier and will provide boost to domestic manufacturers.
  • Basic Duty Exemption on solar tempered glass/solar tempered glass withdrawn and 5% concessional imposed.          Imports likely to become costlier and will provide boost to domestic manufacturers.

      Solar lamp being exempted from excise duty from 25% to NIL. Solar lamps/lanterns will become cheaper and their demand likely to boost in excessible in rural areas,
      Promote entrepreneurs among SC/ST and women – 2.5 lakh entrepreneurs to be created          Decentralized renewables likely to get boost as new entrepreneurs likely to enter in the sector.

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Inter- Regional Power Transfer capacity enhanced by 71% in southern region in last 18 months: Shri Piyush Goyal

Transmission schemes comprising 2500 Circuit KMS transmission lines and 4 new 765 KV & 400 KV sub-stations planned for West Bengal

Govt plans to spend Rs 3500 crore to boost Inter State Transmission System
Shri Piyush Goyal, Minister of State (IC) for Power, Coal and New & Renewable Energy, in a media briefing organized here today, said that transmission sector has always been a priority area for the government. He said that the Power Ministry has already exceeded this year’s transmission target. Shri Goyal gave details of various Transmission projects being undertaken in Southern Region , West Bengal and North Eastern Region ( NER) , which will help improving overall transmission systems in these regions.

Southern Region

Shri Piyush Goyal told that the inter regional power transfer capacity to Southern Region has been enhanced by 71% (2450 MW) in last 18 months and at present it is 5,900MW. He informed that this step has greatly facilitated southern region states to access power from resource rich areas. The synchronous connection of Southern grid with rest of the nation has led to reduction in exchange rate of power from Rs. 6-7 per unit to Rs. 3-4 per unit. On few days, one price across the entire country has been achieved, meaning thereby that there was no congestion, he added. The Minister also informed that various new links have been taken up for implementation to enhance power transfer capacity to Southern Region with an estimated cost of Rs. 38,000 Crore. This includes 6000 MW, ±800kV HVDC Bipole system between Raigarh (Western Region) and Pugalur (Southern Region). The power transfer capacity to Southern Region shall be enhanced progressively to about 17000 MW by 2019-20.

West Bengal :

Speaking on the occasion, Shri Goyal stated that in order to strengthen the inter-state transmission system in West Bengal, new transmission schemes comprising of about 2500 circuit kms transmission lines and 4 new 765 kV & 400 kV sub-stations have been planned. These schemes include interconnection between Northern and Southern part of West Bengal, new sub-stations near Kolkata (Rajarhat, Jeerat ) & Kharagpur, HVDC/AC station at Alipurduar and first 765 kV line in West Bengal at an estimated cost of about Rs 10000 Crores . These schemes shall go a long way in enhancing the power exchange between National Grid and West Bengal as well as in importing power from new hydro projects in Bhutan.

North Eastern Region :

Shri Goyal further said that a 400 kV ring system along with 5 new 400 kV sub-stations has been planned to provide a quantum boost to inter-state transmission system in NER, at an estimated cost of about Rs. 3500 crore. This interconnection shall facilitate enhanced exchange of power among states within NER as well as between NER and other parts of the country. These schemes are planned to be commissioned progressively by 2019-20. He added that a comprehensive scheme for strengthening of intra-state transmission and distribution system in all NER States including Sikkim comprising of about 8000 circuit kms transmission & distribution lines and 234 transmission & distribution sub-stations has been approved by Govt of India at an estimated cost of about Rs. 10,000 Crore. The scheme is being implemented by POWERGRID. The scheme covers entire area of NER and shall make the intra state system strong enough to cater to power demand of NER states for next 10 years. This scheme is planned to be commissioned progressively over next 3-4 years.

The Minister told that recently, an 1800 km. long ± 800kV, 6000 MW multi-terminal HVDC line from Bishwanath Chariyali (Assam) in NER to Agra in NR along with 1500 MW terminals at Bishwanath Chariyali (NER) & Agra (NR) has been commissioned at an estimated cost of about Rs. 9000 Crore. The HVDC terminal capacity is to be enhanced to 3000 MW by 2016. This link shall give a boost to hydro power development in NER and can also facilitate transfer of power to NER in case of power deficit situation.


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