Private power companies have asked the government to provide fiscal sops in the budget, including a sharp reduction in the Minimum Alternate Tax (MAT). They have also asked for policy initiatives to address the problem of infrastructural bottlenecks that are hampering evacuation of coal to power plants.
The Independent Power Producers Association of India (IPPAI), the representative body of private power companies, has made a host of demands, including a 10-year holiday for all clean energy projects, concessional duty on naphtha imports to help run stranded gas-fired generation capacities, withdrawal of excise and import duty on coal to bring down generation costs, exemption of income generated from sale of carbon credits by power plants, duty exemption for machinery used in coal washeries and power equipment and removal of excise duty on bricks manufactured using fly-ash generated in coal-based power plants. The IPPAI has also sought the priority sector lending status for renewable energy projects and permission to select agencies to issue tax-free bonds to raise money for financing clean energy projects, 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 the Renewable Energy Certificate (REC) market and generation-based incentives for renewable energy projects.
The association has suggested that projects that implement clean technologies be given benefits in taxes and manufacturers who have already adopted internationally recognized clean technologies be exempted from levy of any clean energy cess. The power producers have urged the government to create a mechanism to monitor utilization of clean energy funds which has been rather slow so far.
“Fund should be utilized to support off-grid solar power generation projects and purchase of renewable power by distribution companies in excess of their Renewable Purchase Obligation (RPO) targets,” the IPPAI said.
