Here is a collection of reactions from industry captains to the Union Budget 2021 that was presented on February 1, 2021, by Union Finance Minister, Ms Nirmala Sitharaman.
Long-term opportunities for India Inc.
The Union Budget 2022 covered areas that will have a multiplier effect and create long-term opportunities for India and India Inc. As a player in the power industry, we appreciate the focus on capital expenditure, education and research, and bank recapitalization. The announcement to expand the national infrastructure pipeline as well as reinvigorate the textile sector through textile parks will create jobs and further push infrastructure development. We see a major opportunity for power sector players here as the need for reliable electricity will be necessitated for uninterrupted operations.
Besides, the proposal to monetize transmission assets will expedite infrastructure creation and even channel in more funds for further investment. This may also open operation & maintenance in these assets to private players. Additionally, we see the Rs.2,500 crore funding to promote renewables and the push for a Hydrogen Energy Mission from green power sources as good news in the longer run for the power sector.
Competition in power distribution can help ensure performance-based assistance totaling Rs.3 lakh crore for DISCOMs doesn’t become a redux of Uday 2.0. The industry will in parallel need to adapt to the higher duties on solar cells while also balancing the continued GST slabs.
—N Venu, Managing Director, Hitachi ABB Power Grids in India
Much needed assistance to discoms
The prime objective of Budget’21 is to boost and revive the economy that suffered a major setback due to the global pandemic COVID-19 while also increasing the purchasing power of the customers. Allocation of Rs 3.05 lakh crore outlay over 5 years for a more revamped reforms-based power distribution sector scheme will provide assistance to the DISCOMS which further will benefit us in establishing well-defined strategies and plans to generate more demand and ensure smooth power supply. Further, the government’s announcement to boost renewable energy, solar energy corporation to boosting renewable energy development would in turn help us frame the sector very differently and efficiently. Additionally, looking ahead at the zeal to augment the country’s infrastructure with highway, enhancing public transport in urban areas will prove to be beneficial for the overall development of the society and give the much needed boost to manufacturing companies like ours to get back to powering the economy as per pre-Covid levels.
—Anil Gupta, Chairman-cum-Managing Director, KEI Industries Ltd
Towards a capex-led economy
Budget 2021 is a budget for an Aatmanirbhar Bharat; a forward-looking budget focusing on construction and capex-led economic recovery. Significant allocation towards creating a future-ready Railway system, 100 per cent Railway Electrification by 2023, focus on DFCs and Urban Infra, including new Metro projects and emerging technologies, infra creation for Power Distribution companies, expansion of Gas Distribution network to 100 new cities, thrust on Renewables, developing one lakh Digital Villages through BharatNet, and the creation of a Development Financial Institution for infrastructure financing augurs well for KEC International Ltd.
—Vimal Kejriwal, Managing Director & CEO, KEC International Ltd
Competition in power distribution space welcome
The proposal to offer more choice to consumers by introducing competition in the power distribution space by kick-starting Rs 3 lakh crore reforms-based result-linked power distribution sector scheme for state power distribution companies is likely to address the long hanging Transmission & Distribution (T&D) issues and give relief to the power producers, thereby ensuring health for the entire value chain. It is also good to see the government government’s focus towards ensuring smart metering, which will help cut the commercial losses in power distribution. Further, the proposal to double the MSME allocation with Rs 15,700 crore for medium and small enterprises in FY22 will give the necessary push to the sector.
—Anil Chaudhry, CEO, Schneider Electric India Pvt Ltd.
In progressive direction
The direction of the Union Budget 2021 seems progressive. However, more focus on the realty sector would have been welcome. Having said that, the Government’s decision to extend the tax benefit to boost demand and supply of affordable housing, and providing the much-needed push for the metro expansion projects across the nation will propel growth across segments including the elevator industry in India.
—Manish Mehan, CEO & MD, thyssenkrupp Elevator (India)
Focus on clean energy is a positive step
Premier Energies welcomes the budget. Our honourable finance minister in her 2021-22 Budget speech, announced promoting clean energy initiatives as the Government of India’s commitment to combating climate change. Allocation of resources for solar and renewable energy is a step in the right direction. This will certainly help tackle the burgeoning problem of poor air quality in major Indian cities. By focusing on clean energy, we will be also able to contribute to a cleaner and greener world. As one of the leading domestic players in the renewable energy sector, we will work with the government closely to achieve the target of 175 GW of renewable energy capacity by 2022.
—Chiranjeev Saluja, Managing Director, Premier Energies
Promises revival of the economy
The Union Budget 2021 looks promising for the overall growth and revival of the economy which has been impacted due to the pandemic that the entire world witnessed last year. Capital infusion of Rs.1,000 crore to Solar Energy Corporation of India and Rs.1,500 crore to Indian Renewable Energy Development Agency will give a further boost to the non-conventional energy sector which will help in embracing the country’s green energy movement. Investing in the infrastructure sector, decreasing regulatory restraint, strengthening the regulations, executing digitization in several segments should act as mechanisms in enhancing India’s rank to improve the process of doing business. Notification on phased manufacturing plan for solar cells and solar panels will help in supporting Atmanirbhar Bharat and ramping up domestic capacity. Also, the proposed hike in the duty on solar inverters from 5 per cent to 20 per cent is going to boost domestic production which will further push the Government’s thrust on Atmanirbhar Bharat. The government’s proposal of launching a Hydrogen Energy Mission in 2021-22 will play a significant role in moving towards clean power resource. Considering the current times, this budget is focused on India’s development and is commissioned to accelerate the growth rate.
—Bikesh Ogra, Global CEO and Director, Sterling and Wilson Solar Ltd
Good attempt to boost renewables
We appreciate the government’s attempt to boost the RE sector, Rs.2,500 crore has been allocated to Solar Energy Corporation and Indian Renewable Energy Development Agency. FM has also announced that a framework will be provided to bring in a more level-playing field and break the monopoly of incumbent companies in power distribution. This is a commendable move, and we hope that this benefits the end-consumer. Further, Rs.3.06 lakh crore has been earmarked to assist discoms for infrastructure creation.
We are happy to see that there will be an increase in duties on imported solar inverters and solar lanterns. On the flip side, it is disappointing to note that there is no mention of Basic Customs Duty on solar panels – a longstanding appeal from the industry – whose implementation is pending since the last budget. Given that the safeguard duty ends in July, it leaves the solar developers a large window of opportunity to import and stock modules from outside India, resulting in a huge blow to domestic solar manufacturers.
—Bharat Bhut, Co-founder & Director, Goldi Solar
Reforms-oriented Budget
The Union Budget for 2021-22 has introduced many reforms benefiting the manufacturing, infrastructure and automobile sector along with the announcement of additional PLI (Production Linked Incentive) schemes. The government aims to spend Rs 1.97 lakh crore on various PLI schemes over the next five years to boost the manufacturing sector. This will attract global players in the Indian manufacturing sector, as the government is planning to offer plug-and-play infrastructure to the companies willing to come to India.
For the year 2022, more economic corridors are planned to boost road infrastructure with capital expenditure at 5.54 lakh crore. We expect strong growth to continue in the cement and mining sectors driven by recent policy initiatives which are further reinforced through the budget. Besides, chemicals and power sectors which are critical for us, should also grow strongly given the support from the government. We welcome all the policies announced in today’s budget and we are very positive that it will put Indian manufacturing sector back on an aggressive growth trajectory after a pandemic induced setback.
—Vivek Bhatia, MD & CEO, thyssenkrupp Industries India
Solace to pandemic-hit MSMEs
FM Nirmala Sitharaman presented the first-ever paperless budget with a special focus to Healthcare and Infrastructure sector. The announcement for Rs.64,180 crore for the overall healthcare sector in the Union Budget of 2021 was a vital move by the Government to strengthen the health and wellness centers across India and contribute to our National Health Mission. The vision for recovery in the state-wise infrastructure activities supported by robust investments will give the economy the much-needed impetus and help us march towards the $ 5 trillion marks. The collateral-free loans and funds for MSMEs will stimulate growth and render solace to MSMEs hit by the pandemic.
—Yogesh Mudras, Managing Director, Informa Markets in India
Major commitment towards stability
The budget is very comprehensive and proposals are well thought through which will provides fiscal support for investment and consumption while also providing a 5 year roadmap to come back to prudent norms. Higher outlays for various sectors augur well, as does the fact that the quality of expenditure is improving with more thrust on capital expenditure. Setting up of a DFI to fund long gestation projects, and an asset reconstruction cum asset management company to deal with stressed assets are welcome steps. Limiting reopening of assessments and providing for a faceless ITAT will encourage the honest taxpayer. Similarly, several regulations and laws subsiding into a single securities code is a very positive step. Finally, no major changes in the tax structure is a major commitment to provide stability.
—Subhrakant Panda, Vice President, FICCI & Managing Director, IMFA
More GST-related reforms needed
The basic need of almost all sectors has been taken into consideration. Emphasis has been laid on making the complex taxation process easier and simpler. Steel and copper prices which are going up unnecessarily, to curb on it Custom Duty has been reduced by 2.5 per cent and 20 per cent custom duty has been imposed on solar inverter, realizing the dream of Make in India along with making Indian power electronics units self-sufficient is a welcome step. This time most of the focus is on the formation of a regulatory institution, So that the functioning of those organizations can be made smoother. Financial assistance given to financial institutions has made to make contribution more supportive in development. One expected and necessary thing in budget, change in taxation for middle class is missing. Going forward we expect more reforms in GST through mini budgets. Overall, this budget will prove beneficial for the improvement of the far-reaching economy.
—Dinesh Patidar, Chairman & Managing Director, Shakti Pumps India Ltd
Focused on Inclusive Development
I am particularly inspired by the Union Budget presented by our FM. It has the right set of priorities and initiatives required to stimulate our nation’s economy post the COVID 19 crisis. The budget is bold and focuses on the basic drivers of our economy. Focus on infrastructure, power sector and renewable energy is particularly encouraging, however, there is ample impetus for healthcare and Aatmanirbhar Bharat. I am also delighted to see that the government is focusing on Inclusive Development, Innovation and Human Capital which is going to build the new India of our dreams.
This is a very comprehensive budget and there is enough in this budget for all sections of the industry and society. The stimulus for the MSMEs will help build the foundation of a strong domestic economy. It is rare to see such a wide range of coverage in the Union budget and I congratulate the Finance Minister and the Government of India for the same. I am sure this budget will go a long way in building a sustainable and strong India.
—Tulsi Tanti, Chairman, Suzlon Group and Chairman, Indian Wind Turbine Manufacturers (IWTMA)
Will help nurture manufacturing sector
Manufacturing is an integral part of global supply chains, with the potential of core competence and cutting-edge technology. To sustain the double-digit growth, some of the initiatives will help bring scale and size in critical sectors, develop and nurture global champions and provide employment to the youth. The power sector has seen several reforms and achievements in the past 5 to 6 years. The Union budget 2021 announcement on the expansion of the metro rail network and augmentation of city bus service will create more avenues for companies like ours. To boost the non-conventional energy sector, the government has provided an additional capital infusion of Rs.1,000 crore to India’s Solar Energy Corporation and Rs.1,500 crore to Indian Renewable Energy Development Agency.
Furthermore, to encourage domestic production, the government has also increased duty on solar inverters from 5 per cent to 20 per cent, and on solar lanterns from 5 per cent to 15 per cent. Additionally, reducing duty on copper scrap from 5 per cent to 2.5 per cent benefiting copper recyclers. With Atmanirbhar Bharat, the government has already unveiled plans in core sectors to stimulate economic growth and spur investments.’
—Deepak Chhabria, Executive Chairman, Finolex Cables Ltd
Focusing on nation’s growth
As was expected, the Union Budget 2021 has focused on our nation’s growth and brings a very positive sentiment to facilitate the economic reset.
Reflecting on the continued focus on ‘AtmaNirbhar Bharat’, the Finance Minister has announced extended support for the manufacturing of electronic components & sub-assemblies, including mobile phones.
Specifically for the Electrical Construction Materials industry, reduction of import duties on steel flats & copper scrap, long-awaited revision in the labor laws (including women being allowed to work in night shifts) are some of the significant steps that will create a strong export-led economy in the Manufacturing sector.
With special sops in renewable energy, specifically for Solar; the government aims to encourage domestic production by ensuring a uniform policy across the states. Thus, energy generation & domestic Solar module capacity will essentially remain a key area of focus. One expected similar encouragement for EV adoption in India, but perhaps it was not overtly mentioned in the FM’s budget speech.
—Dinesh Aggarwal, Joint Managing Director, Panasonic Life Solutions India Pvt Ltd
Private sector needs to be involved
Tata Power welcomes the step announced today for the distribution sector reforms as most of the discoms are reeling under huge losses, and finding it difficult to provide uninterrupted power supply. We also welcome the scheduled discussion on the Electricity Amendment Act 2021 during the ongoing budget session as when implemented in its true letter and spirit, the Act will provide the much needed independence to the regulatory mechanism for an effective and timely decision making. It will also pave the way for a speedier implementation of the National Tariff Policy, a must for the tariff rationalisation across all segments of consumers. This is very crucial for an overall industrial development for realization of Atmanirbhar Bharat. Besides the above, for the revival of the power sector the Government should use announced funds to provide transitional support to state governments who want to initiate distribution reforms by involving private sectors players.
—Sanjay Banga, President, Transmission & Distribution, Tata Power
A boost to non-conventional energy
The thrust of the Budget is on reviving the economy. It is positive and refreshing in its scope and scale. All the announcements are forward looking and will put India back on the growth trajectory. The announcement of ₹3.05 trillion package for discoms is encouraging and will reform the ailing power distribution sector. Prime Minister Narendra Modi government’s focus on improving financial health of state power utilities will ensure consumers get more choices as it will promote competition, reliable power supplies and make sector attractive to foreign investors, besides giving overall boost to the industry.
The Budget has also given a boost to non-conventional energy sector by allocating Rs.1,000 crore to Solar Energy Corporation of India and Rs 1,500 crore to Indian Renewable Energy Development Agency. It is a welcome move.”
—Ratul Puri, Chairman, Hindustan Power
Power sector gets due emphasis
We would like to thank the government for giving due emphasis to the Power sector in this year’s Budget 2021. In a highly anticipated move our Honourable FM announced a Rs.3,05,984-crore scheme to reform the power distribution sector in the country. T&D losses have plagued the Power sector for a number of years and this scheme will surely help reduce losses and improve efficiency of electricity distribution companies (discoms). The proposed amendments and Electricity (Amendment) Bill, 2021 with measures such as ‘de-licensing’ of the power distribution business to bring in competition is a very consumer centric move which aims at creating a level playing field for all distribution companies. The Rs.1,000-crore grant for the growth of the Solar Energy sector and Rs.1,500 crore to the Renewable Energy sector is also a welcome move and will help the country in achieving the ambitious target of 175 GW of renewable energy capacity by the year 2022. These measures and reforms will definitely help improve the health of the sector and enhance growth in the coming few years.
—Kush S, CEO, Essar Power
No allocation for Smart Cities
We expected more from the Union budget 21-22. While the focus has been on infrastructure, FM has allocated Rs.93,400 crores for roads only, no allocation has been made for development of Smart Cities. Though FM talked about double digit growth of the manufacturing sector for India to become $5 Trillion economy, no roadmap has been laid out for the same. We also need more clarity on how Rs.2,217 crore allocated for setting up 42 urban centres to tackle pollution problem will be used. Change in definition of “small” companies may benefit some Small-scale companies, provided more support for Small scale companies are announced.
—Udaya Bhaskar Rao Abburu, CEO & Managing Director, iRam Technologies
National Hydrogen Energy Mission is a welcome move
It is motivating to see that our government is focused on Climate Crises and is giving impetus to the renewable and green energy sector with the National Hydrogen Energy Mission. Operating in the green energy space with Fuel Cell & Hydrogen has been an exciting journey for us so far and with the additional push from the Indian government along with a special plan for its growth, the sector is bound to take a gargantuan leap soon and encourage investments in this sector in India. Taking cue from other regions across the world, driving change and encouraging the green hydrogen sector via various policies, the Indian government is well set on the path to establish a leadership position in Green Hydrogen just as we did with the International Solar Alliance under the dynamic leadership of Honourable Prime Minister.
—Siddharth R. Mayur, Founder and Managing Director, h2e Power
Adverse impact on rooftop solar
The FY2021-22 budget has left non-utility solar players to fend for themselves. Adding to the misery is the capped net metering of 10KW, which is likely to impact 70 per cent of the rooftop solar business, the government’s stance to raise import duties on solar inverters will further discourage potential investment in the solar development segment, and adversely affect employment. Similarly, the allocation of Rs.2,500 crore fund to SECI and REDA (cumulatively), is a play on optics and is yet again, not likely to benefit the private players. Moreover, the silence of the authorities on the GST front has now become a matter of concern, which if introduced, had the potential to generate revenue for the Government, and aide private players alike.
The only silver lining in the budget is the Government taking note of the Hydrogen Energy sector and we hope for it to have a serious outlay. This in-turn is likely to prompt Indian players in the sector to take the lead globally.
—Animesh Damani, Managing Partner, Artha Energy Resources
Supporting green energy
Indian Renewable energy industry and especially the solar sector is appreciative of the Government of India’s initiatives to support green energy throughout the decade and especially during the pandemic. We eagerly await the detailed plan on the phased manufacturing plan for solar cells and solar panels, announced by the Finance Minister to scale-up domestic capacity. Additionally we believe, raising duty on solar inverters from 5% to 20% and on solar lanterns from 5% to 15% to encourage domestic production will create demand and bring in revenue for further progress. As domestic solar manufacturers, we are appreciative of the Government’s focus towards supporting solar manufacturing growth in India and hope the new phased manufacturing plan for solar cells and solar panels to embody the intent.”
—Gyanesh Chaudhary, Managing Director, Vikram Solar
Groundwork for economic recovery
It is a growth oriented and forward looking Budget. The Finance Minister’s focus on healthcare, infrastructure, power and the financial sector will have a positive, broad based impact on the economy. By increasing capex spending significantly without hiking taxes, and instead focusing on expanding economic activity, the FM has set the groundwork for a sharp and sustained economic recovery over the next several years.
—Sumant Sinha, CMD, ReNew Power
Good for discoms, mixed bag for renewables
Speeding up of discom reforms through a package of Rs 3.05 lakh crore over the next five years is a welcome step to keep financial health of discoms in check. Another announcement of breaking the monopoly of power discoms and providing options to consumers should further open up rooftop and open access segments. However, clear enabling provisions should be enumerated by the government. These are positive developments focusing on revival of discoms and also opening up the sector to competition and new technologies.
However, the Budget is has a mixed bag of luck for the renewables industry. Some pending requests for rationalization of GST to a lower 6.30 per cent composite rate and deferment of CCDs on solar module imports have not been considered. Also, Renewables and Solar should be defined as a part of “Infrastructure” and new DFI for infrastructure funding should be permitted to lend to new Renewable/Solar projects also. We suggest the government should review these and come out with required modification in relevant laws to help renewable and solar IPPs.
—SK Gupta, CFO, Amp Energy India
Empowering electricity consumers
The announcement of creating a Framework to give consumers the choice of procuring electricity from any distribution company is a welcome move. From consumer’s point of view, giving them power to choose will ensure they are better served. There will also be improved efficiencies in the Distribution companies if they have to compete with each other to stay ahead. However, unless there is guarantee that the policies will be stable for next few years, private players will be hesitant to enter the business of distribution.
The outcome and result based financial package for the discoms is also a good move and an improvement over the existing UDAY scheme to address the stressed discom health. This financial aid is only a short term measure. Reforms such as Direct Benefit Transfer Schemes for subsidies along with financial packages is necessary as a long term strategy to help India’s energy sector.
—Guru Inder Mohan Singh, COO, Amplus Solar
Focus on self-reliant India
Even at a time when the economy is passing through unprecedented circumstances, honourable Finance Minister has taken a bold step by presenting a development oriented budget. In particular, the budget 2021-22 focuses on reform and self-reliant India, which will strengthen the industrial sector and help in country’s progress. Especially in this budget, emphasis has been laid on renewable energy. As the government has in this budget proposed to raise customs duty on imported solar inverters to 20 percent from five per cent earlier, it will surely give a boost to the domestic solar manufacturing.
—Aruah Gupta, Director & CEO, Okaya Power Pvt Ltd
Towards transparent price discovery
Finance Minister Nirmala Sitharaman in her Union Budget 2021 speech has put a lot of focus on monetisation of stressed and idle assets creating opportunities for electronic platforms for transparent price discovery processes. Stressed asset resolution by setting up an asset reconstruction company and asset management company, creation of a Special Purpose Vehicle to carry out monetisation of non-core assets including surplus land would contribute to the idea of AtmaNirbhar Bharat and help shore up essential revenues for economic revival. For the steel sector, voluntary vehicle scrapping policy to phase out old and unfit vehicles would increase availability of scrap.
—Vinaya Varma, MD and CEO, mjunction services
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