February 2017- Editor’s note

February 22, 2017 10:08 am0 commentsViews: 16

ddecember1In Budget 2017-18, Finance Minister Arun Jaitley announced a series of measures such as 20 gigawatts (GW) of solar capacity addition, solarising about 7,000 railway stations in the medium term, higher spending on rural electrification, two new strategic oil reserves (in Odisha and Rajasthan) and lower import duty on liquified natural gas (LNG).

Rural electrification: The Finance Minister said full electrification of 18,452 villages identified in 2015 will be achieved by May 2018, for which an extra Rs 4,814 crore will be spent in the next financial year. The budget document said that out of the total un-electrified villages in the country, around 61.4 per cent or 11,327 villages have been electrified till December 2016. A sum of Rs 8,500 crore has been provided for Deen Dayal Upadhayaya Gram Jyoti Yojna (DDUGJY) and Integrated Power Development Schemes (IPDS) of which Rs 5,448.03 crore was reportedly released in December 2016.

Solar: Over the last two years, the share of solar in the country’s energy mix has been gradually increasing and the industry has managed to drive tariffs down from Rs 12 a kwh in 2010 to a low of about Rs 3 in 2016. It is felt that the govt should encourage indigenous manufacturing of solar panels, as per the Make in India campaign, so as to reduce dependence on imports by extending special concessions to domestic manufacturers so that they can overcome constraints such as limited manufacturing capacities and high cost of financing. Here low-cost finance options can go a long way in promoting the solar panel industry. Also to achieve the target, there are major programmes that involve canal tops, solar pumps, rooftops etc, and maybe here we could take a leaf out of international examples of solar roof tiles and solar roads and maybe use solar panels along the vast national highways that traverse across the many states of India.

Oil conglomerate: Analysts feel that the government’s move to merge state-run oil PSUs into a single entity will enable the companies to withstand international volatility in the oil and gas segment. The integrated public sector oil major, it is said, may match Russia’s Rosneft and UK’s BP Plc in terms of market value and financial power. In terms of the renewable energy (RE) target, in October 2016 RE made up 15 per cent of India’s installed electricity production capacity, up from 13.1 per cent in August 2015, as per govt data. To achieve its target, India must add 130.76 GW of RE over the next six years, an average of 21.7 GW per year or three times the capacity it added in 2016. So it is to be seen if 2017-18 becomes a turning point for the country’s historic RE journey and rural electrification drive.

R Srinivasan


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