A turning point for India’s energy and manufacturing sector?, ET EnergyWorld

New Delhi: As Union Finance Minister Nirmala Sitharaman gears up to present the Union Budget for 2024-25 on July 23, industry leaders from the critical materials, energy and manufacturing sectors have outlined their expectations for significant reforms and policy support. With the budget session set to begin on July 22, these leaders have stressed the need for strategic interventions to enhance India’s global competitiveness and drive sustainable growth. Rajat Verma, Founder and CEO of LOHUM, emphasised the importance of ecosystem-positive measures for the critical materials sector. “In the upcoming budget, we hope to establish long-term ecosystem-positive measures like Extended Producer Responsibility Floor Price (EPR) so that India’s sustainable critical materials sector can flourish and establish India as a global leader in this space,” Verma said. He emphasised on the need for a PLI scheme for recycling secondary materials, adding, “We have been long awaiting and calling for a PLI scheme for recycling secondary materials and we appreciate the government taking note of it.” Verma also called for rationalisation of GST in terms of scrap and technology partnerships with established Indian players.

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Pratik Agarwal, Managing Director, Sterlite Power and Chairman, Serentica Renewables, highlighted the energy sector’s expectations for significant reforms. “As we approach the Union Budget, the energy sector is eagerly awaiting key reforms. I am hopeful of comprehensive measures to achieve a comprehensive transformation in distribution,” Agarwal noted. He advocated for extension of full ISTS exemption for another two years and called for policies that open up the sector to sourcing competitive components from globally. Agarwal emphasised the importance of integrating extensive energy storage solutions and exploring technologies like small modular reactors (SMRs) to diversify India’s energy mix.

Mahesh Girdhar, Managing Director and CEO, EverEnviro Resource Management Pvt Ltd, discussed the potential of alternative fuels. “We foresee a strong growth in the adoption of alternative fuels on the back of government reforms and push for infrastructure development. Gradual increase in the use of biogas and biomethane to 20% by 2030 and substitution of natural gas could help India reduce its dependence on fossil fuels and reduce its import bill by almost US$ 29 billion,” Girdhar said. He emphasised the need to secure guaranteed offtake of compressed biogas (CBG) by various industries and establish a framework for a grid system similar to solar energy systems.

Deepak Sharma, Managing Director and CEO, Schneider Electric, Greater India, highlighted the role of the Budget in harnessing the manufacturing sector for economic growth. “The Indian economy is projected to grow at ~6.8% in fiscal 2025, outperforming other major economies globally. With the upcoming Union Budget, we expect the government to tap manufacturing potential, create ample employment opportunities and expand economic activity, which will further impetus the current growth momentum,” commented Sharma. He looked forward to initiatives supporting new energy technologies such as green hydrogen, solar technologies and electric vehicles, which are aimed at transforming India’s energy landscape and achieving net zero emission targets.

Rajeev Kashyap, Vice President and Managing Director, Nextracker India, highlighted the crucial role of the budget in reaffirming the government’s commitment to renewable energy. “With the upcoming union budget, we expect the new government to reaffirm its commitment to renewable energy, especially in terms of innovation, local manufacturing, technology integration and R&D in the solar sector,” Kashyap said. He called for a reduction in GST rates on solar equipment and systems to boost domestic manufacturing and increase project returns. Kashyap also stressed on the need for policies to strengthen battery storage and develop skilled manpower for the renewable energy industry.

Amit Jain, CEO and Country Manager, ENGIE India, expressed his expectation for the budget support for renewable energy initiatives. “ENGIE India looks forward to the Budget 2024 as a key step towards promoting renewable energy initiatives. Our vision is based on a future where renewables provide clean, reliable and affordable energy and solar energy plays a central role in our commitment to achieve net zero carbon emissions by 2045,” Jain said. He emphasised on the need for a simplified regulatory environment to integrate renewable energy sources into the national power grid and initiatives to promote public-private partnerships to develop distributed energy infrastructure.

Sirajuddin Ali, Founder and CEO of Malitra India, emphasised the need for the development of EV charging infrastructure. “Providing subsidy for this purpose can significantly increase the expansion and availability of charging networks across the country, encouraging more consumers to adopt EVs,” Ali said. He also called for addressing the issue of reversing GST input credit for EV charger manufacturers and empowering SMEs and startups in the charging industry.

Pradip Kumar Das, CMD IREDA, outlined expectations for the government’s continued focus on renewable energy projects. “With the upcoming Union Budget, we expect the government to continue its focus on 50 GW of annual bidding for solar and wind projects by 2028 and further increase its sustainable financing to support RE growth,” Das said. He also envisaged a significant budget allocation for rooftop solar installations and support for alternative energy sources like CBG, ethanol and green hydrogen.

Vikram V, Vice President and Co-Head, Corporate Ratings, ICRA Limited, stressed on the need to support renewable energy, energy storage projects and strengthening of the transmission and distribution grid. “Given the healthy growth in electricity demand and the focus on renewable energy, measures to support renewable energy, energy storage projects and strengthening of the transmission and distribution grid are likely to continue in the upcoming fiscal,” said Vikram. He stressed on the importance of policy measures to promote the development of energy storage systems and incentives to promote grid-scale production of battery systems.

Prashant Vasisht, Senior Vice President and Co-Head, Corporate Ratings, ICRA Limited, discussed the expectations of oil marketing companies in terms of fiscal provisions. “Oil marketing companies expect adequate fiscal provisions to compensate for any losses incurred on sale of automotive fuels and sensitive products – LPG and SKO,” Vasisht said. He also highlighted the industry’s demand for discontinuation of Special Additional Excise Duty (SAED) on crude oil and some refined products and inclusion of natural gas, crude oil and other petroleum products under the GST regime.

Suyash Gupta, CEO, Indian Auto LPG Coalition, urged the government to take decisive action to encourage cleaner mobility. “Auto LPG, the third most used automotive fuel in the world, offers a practical solution to reduce operating costs and improve air quality. The Budget 2024-25 should encourage OEMs to introduce LPG vehicles at affordable prices, which will boost consumer demand and accelerate adoption,” Gupta said. He also stressed on the need to reduce GST on Auto LPG to make it more cost-competitive and encourage greater adoption.

Akshit Bansal, CEO and Founder, Statiq, highlighted the need for key reforms in the auto sector. “The pre-Budget outlook for 2024 is based on key reforms for the auto sector, especially in promoting sustainable green energy,” Bansal said. He called for production-linked incentive (PLI) schemes for EV charging companies, GST rate cuts for EVs and charging stations, and incentives for switching heavy commercial vehicles to eco-friendly alternatives.

Ankit Sharma, Co-Founder and Director, Vidyuta Materials Pvt. Ltd., emphasised on the importance of local manufacturing of cathode rayon (CAM). “Our commitment to local manufacturing of CAM aligns perfectly with the vision of Atmanirbhar Bharati, which aims to reduce dependence on imports and strengthen self-sufficiency in battery manufacturing,” Sharma said. He called for financial incentives, R&D grants and infrastructure development to support the EV ecosystem in India.

Raju Kumar, Energy Tax Leader, EY India, highlighted the energy sector’s expectations for key announcements. “Based on the February 2024 Interim Budget, as the Union Budget 2024 approaches, industry leaders across sectors are pinning their hopes on strategic interventions that promise to revive their sectors and are aligned with India’s broader aspirations for sustainable growth and economic resilience. Having earmarked significant funds for solar and green energy projects and Viability Gap Funding for wind energy, the sector is eyeing further improvements,” Kumar said. He called for policy support for the green hydrogen mission, reduction in GST on hydrogen and financial support for developing nationwide transmission and metering infrastructure.

As the Union Budget 2024 approaches, industry leaders across sectors are pinning their hopes on strategic interventions that promise to revive their sectors and are in line with India’s broader aspirations for sustainable development and economic resilience.

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