With the NDA Government bullish on renewable energy generation, power sector players have urged upon Finance Minister Arun Jaitley to give a 10-year holiday for all clean energy projects, as well as to provide concessional duty on naphtha imports to help run stranded gas-fired generation capacities in the Union Budget for 2015-16.
The Independent Power Producers Association of India (IPPAI) in its wish list for the forthcoming Union Budget which is to be presented by Jaitley on February 28, have also sought withdrawal of excise and import duty on coal to bring down generation costs.The association has also sought priority sector lending status for renewable energy projects under the guidelines laid down by the RBI and permission to select agencies to issue tax-free bonds to raise money for financing clean energy projects.
In addition to this, they have urged upon the Finance Minister to provide dividend distribution tax benefits on profits earned by renewable projects, policy change to allow continuation of tax holiday post acquisition, use of national clean energy fund to bring liquidity in Renewable Energy Certificate (REC) market and generation-based incentives for renewable energy projects.
The companies have also asked for policy initiatives to address infrastructural bottlenecks hampering evacuation of coal to power plants. They have sent this charter of demands to the Ministries of Power and Railways also apart from the Finance Ministry. The power producers have sought an exemption on income generated from sale of carbon credits by power plants, duty exemption for machinery used in coal washeries as well as removal of excise duty on bricks manufactured using fly-ash generated in coal-based power plants.
The association has also asked for further raising the capacity ceiling from 25 mw to 100 mw for grant of renewable power status for hydropower projects to facilitate funding for these projects. IPPAI has requested that projects that implement clean technologies be given benefits in taxes and manufacturers who have already adopted internationally recognised clean technologies be exempted from levy of any clean energy cess.
It has also asked for removal of excise duty on bricks manufactured using fly as generated in coal-based power plants. Power producers have also sought policy support from the government to address infrastructural bottlenecks hampering evacuation of coal from mines to power plants. To that end, they have sought that the forthcoming budget should provide for setting up a fully empowered mineral logistics corporation or if that is not possible, then the Directorate of Rail Movement should be converted into an independent commercial entity, involving multi-agency co-operation. This request has been made, keeping in mind the fact that evacuation of minerals, particularly coal has been a challenging issue for Railways as well as Coal India, the association added.