Budget 2018: Positive impact on power sector, Saubhagya to boost demand

The Union Budget for 2018-19 is likely to have an overall positive impact on the power sector with the thrust towards expanding electricity accessthrough flagship schemes is seen boosting demand and a proposed mechanism for uptake of solar power likely to spur capacity creation.

However, the uncertainty over imposition of duties – import duty, safeguard duty and anti-dumping duty on solar — including timelines and their quantum continues for the solar energy sector. The industry was expecting the budget to provide clarity on the issue.

The budget allocates Rs 3,800 crore for Deendayal Upadhayaya Gram Jyoti Yojna (DUGJY) and Rs 4,900 crores for Integrated Power Development Scheme (IPDS). The government has also allocated Rs 16,000 crore for the Sahaj Bijli Har Ghar Yojana (Saubhagya) to enable last mile connectivity for rural households.

“The thrust towards ensuring electricity access to all rural households under Saubhagya & DUGJY schemes is likely to provide a boost in energy demand to some extent, apart from improving the quality of life for rural households. Further, the mechanism proposed to buy surplus solar energy from solar pumps by distribution utilities as well as push for deployment of solar energy under smart city programme would facilitate solar capacity addition, given the improved tariff competitiveness of solar energy,” said Sabyasachi Majumdar, Senior Vice President at ratings agency ICRA.

 

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