Energy Sector Current Affairs - 2020

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Import duty on Green Energy Equipment hiked by 20% in Budget 2020-21

The Budget 2020-21 that was presented by the finance Minister Nirmala Sitaraman in the Parliament increased the import duty of green energy equipment like cells by 20%. This is being implemented to drive local manufacturing of the equipment and lowering the import of low-quality Chinese equipment.

The step is being introduced to protect the local companies and to boost Make in India strategy.

Highlights

The Energy markets is currently one of the fast-growing markets in India. However, the market is dominated by the Chinese companies for their competitive prices. The GoI had earlier imposed safeguard duty over solar cells and models that are imported from Malaysia and China in July 2018. This is to expire by July 2020. Hence, the budget has introduced new duties.

India’s Scenario

India is the third largest consumer of energy after US and China. The manufacturing capacity of India is 3 GW for the solar cells. In spite of this, in 2018-19, India imported 2.16 billion USD worth solar photo voltaic cells.

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Budget 2020: Economic Development-Commerce, Industries and Infrastructure

The Union Budget 2020 was presented by the Finance Minister Shrimati Nirmala Sitaraman. The budget was presented under three themes namely Aspirational India, Economic Development and Care Giving. The Economic Development includes industries, commerce and manufacturing.

The Finance Minster referred to words Sreni (Guilds) and Seti (Wholesale Merchants) from Harappan Civilization seals. This proves that India was rich in trade, commerce and metallurgy even before 4,500 years ago.

The Budget allocated funds for the following

Investment Clearance Cell to be set up

The Budget proposed to set an Investment Clearance Cell that will provide end to end support including pre-investment advisory, information related to land banks and facilitate clearances at centre and state level.

5 new smart cities

The Budget 2020-21 proposes three main activities as the backbone of infrastructure development. They are

  • Upcoming Economic corridors
  • Revitalization of manufacturing activities
  • Technology and demands for aspirational classes

The GoI is to set up 5 new smart cities that will aid in the above developments.

Manufacturing

The Budget focuses on the networks of the manufactured products. It aims to make the chain a part of the global network.

Electronics Manufacturing

The potential of the Electronics Manufacturing sector in job creation is immense. It is important for India to boost domestic manufacturing and attract large investments in the electronics value chain

Scheme to encourage mobile phones manufacturing

The Budget proposes a scheme to encourage manufacturing of mobile phones, electronic equipment and semiconductor packaging. The scheme shall be extended to medical devices as well.

National Technical Textile Mission introduced

India imports 16 billion USD of technical textiles every year. In order to reverse the trend and position India as a leader in Technical Textile sector, National Technical Textile Mission is introduced. The mission is to be implemented in 4 years between 2020-21 and 2023-24. The estimated cost of the mission is 1,480 crores.

Zero Defect Zero Effect Manufacturing

The Budget proposes to all ministries to issue a Quality Standard Order in order to remove defects in the manufacturing. PM proposed the Zero Defect Zero Effect Manufacturing during his speech in Independence Day, 2019.

NIRVIK Scheme launched

The scheme aims at Higher Export Credit Disperse. It will also help to achieve higher expense cover, reduction in premium for small exporters and simplify procedures to claim settlements.

Scheme for reversion of Duties proposed

The Budget proposes to introduce a new scheme to cover electricity duties, VAT, transportation fuels. The scheme will cover duties that are not getting exempted under other existing mechanism. The scheme is to be launched in 2020-21.

Districts as Export Hub

The GoI has been working to improve its exports with a target of making every district an export hub. In order to achieve this, the budget allocated funds for the E-market places and GeM. They will move ahead to create a single platform for procurement of goods. This will help the MSME sector. More than 3 lakh vendors are already on the platform.

The aim of the platform is to increase the overall turnover of these hubs to 3 lakh crores.

FUND ALLOCATION

The Budget 2020-21 allocated Rs 27,300 crores for the commerce and industries sector.

INFRASTRUCTURE

The GoI is working to achieve its set target of investing 100 lakh crores of rupees in next five years (announced in 2019). In order to achieve this, the Finance Minister launched the National Infrastructure Pipeline that will implement 103 lakh crore worth projects.

National Infrastructure Pipeline

It consists of more than 6,500 projects. It includes housing, safe drinking water, health care, access to clean and affordable energy, world class educational institutions, modern railway stations, bus terminals, airports, railway transportation, Logistics, warehousing projects and irrigation.

The project aims to increase ease of living.

Project preparation facility Centre proposed

The facility is to be set up to propose infrastructure projects. It will work towards improving the skills of the youth and in identifying the talent demands of the country. The facility will involve young graduates, engineers, economists from Universities. The facility will also work towards involving many number of youths towards entrepreneurship.

National Logistics Policy to be released

The policy will clarify the role of union government and state governments in the logistics. The policy will create a single window e-logistics market. The policy will focus on employment generation, skills and will encourage MSMEs work towards competitivity.

Development of Highways

The Budget allocated funds to develop 2,500 km of access-controlled highways, 9,000 km of economic corridors and 2,000 km of coastal and land port roads and 2,000 km of strategic highway.

The Delhi-Mumbai Express way and Chennai-Bengaluru Express Way are to be completed by 2023.

The Budget proposes to monetize at least 12 lots of high way bundles of 6,000 km by 2024.

Indian Railways

The GoI has so far commissioned 550 WiFi Railway Stations in the country. The unmanned level crossings have been eliminated. It also aims to achieve electrification of 27,000 km of tracks.

The budget has specially allocated funds for the following in Indian Railways

  • Setting up a large solar powered capacity along side the railway tracks within the land limit of the Indian Railways.
  • 4 Station redevelopment projects and operationalization of 150 passenger trains under PPP model.
  • More TEJAS type trains connecting iconic tourist destinations.
  • High speed train connecting Mumbai-Ahmedabad.
  • 148 km of Bengaluru suburban transport project. The FUND ALLOCATED to the project is 18,600 crores of rupees. The central government will share 20% of cost and will facilitate 60% of external assistance.

Sea Ports

Under Budget 2020-21, the GoI intends to corporatize at least one sea port by the end of the year and list it under stock exchanges.

Inland Water Ways

The Jal Vikas Marg on the National Water Way-1 is to be completed by the end of the year. Budget allocated funds for its completion processes. The 890km Dubri-Sadiya national water way in Assam connectivity is to be completed by 2022.

In order to reduce the environmental impacts of developing waterways, the Arth Ganga model has been conceptualized. This will shift the economic development activities in the rivers towards sustainable development.

Air Traffic

The Budget proposes to develop 100 more airports by 2024 to support UDAN scheme. It is expected that the air fleet number will increase from 600 to 1200 during this period.

FUND ALLOCATION

The Budget allocated 1.7 lakh crores for transport infrastructure.

ENERGY SECTOR

Electricity and DISCOMs

The distribution of electricity sector, the DISCOMs in particular are under stress. In order to address the issue, the budget allocated funds to replace the conventional meters to prepaid smart meters in next 3 years. Through this step, the consumers will be enabled with the freedom to choose the rates and the suppliers.

FUND ALLOCATION

The Budget allocated 22,000 crores for power and renewable energy sector

Oil and Natural Gas

The Open Acreage Licensing Policy (OALP) has so far awarded 1 lakh square kilo metres of area for exploration of private sector. The budget increases the exploration areas. The National Gas Grid so far runs for 16,200. The Budget proposes to increase this to 27,000 km.

The budget also allocates funds for transparent market discoveries and ease of transactions in the oil and natural gas sector.

Private Data Centre Parks to be established

The New Economy is based on innovation, artificial intelligence, IoT, 3D printing, drones, DNA, data storage, quantum computing, and established business models. In order to move ahead in these technologies, the Budget proposes Private Data Centred Parks. A new policy is to be framed in order to achieve this.

Bharat Net

GoI believes that it is essential to communicate with all Gram Panchayats, Health and Wellness Centres, Anganwadis, Government Schools, PDS outlets, post offices and police stations. These places are to be provided with Digital connectivity.

The Bharat Net will link 100,000 Gram Panchayats through Fibre to the Home (FTTH) connections within 2020-21. FUND ALLOCATION for the Bharat Net Programme is 6,000 crores.

Intellectual Property

At the Institute of Excellence, a centre is to established that will work towards the complexity and innovation of the field of Intellectual Property

Knowledge Translation Clusters

The Knowledge Translation Clusters are to be set up under different technologies. This includes new and emerging sectors as well. It will design fabrication and validate proof of concept.

National Science Schemes

In order to achieve , two National Level Science Schemes to create comprehensive databases. It will also work towards mapping of India’s genetic medicines, agriculture and biodiversity management.

National Mission on Quantum Technologies and Applications

The Budget allocated 8,000 crores of rupees for the mission. The mission is to be completed in another 5 years. If India achieves in breaking into the technology, it will be the third pioneering nation in conquering it.

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