Power News Click - SPECIAL issue�Aperiodic (Aniyatkalik) dtd 9^th Feb 2025

My understanding of Union Budget 2025�(Impact on Power/Energy Sector)

All info in this PPT is collected from various open sources available on the internet & News papers. Opinions expressed/ remarks, are my own views, which are based on my LIMITED EXPOSURE to Finance & Economics . You may not agree with my opinion. I respect your views/ opinions.

Compiled by

Vijay L Sonavane

ME (Elect)

Highlights (In Experts’ Opinion)

Union Budget 2025-26 was presented on 1^st Feb 2025, by the FM Nirmala Sitaraman in the Parliament recognising 4 engines of development:

• AG, Micro, Small & Medium Enterprises (MSME), Investment & Exports

Budget 2025-26 sets a fiscally prudent tone while covering key areas such as export promotion, consumption & investment, given the current global economic scenario.

• Direct Tax: No income tax payable upto income of Rs. 12 Lakh. Slabs & rates changed across board to benefit all taxpayers (AI Population: 143 CR & IT payers: 3.2 CR (only 2% population) getting a reduction in TAX & It becomes a headline news in my country ) No reduction in GST, which is paid by almost all population
• Indirect Tax: Rationalization of TDS/TCS/Customs Tariff Structure.
• Public Private Partnerships in Infrastructure. States have also been encouraged to do so.

• FDI in Insurance hiked from 74% to 100% for companies that invest entire premium in India.
• Incentivize Electricity Distribution reforms & augmentation of intra-state transmission capacity by States. Additional borrowing of 0.5% of GSDP will be allowed to states
• For EV & mobile phone battery manufacturing, additional capital goods exempted from Basic Customs Duty (BCD)
• Exemption of cobalt powder & waste, lead, zinc and 12 more critical minerals from BCD, boosting their availability for manufacturing in India
• Export Promotion Mission to facilitate easy access to export credit, cross-border factoring support & support to MSMEs in overseas markets

Financial Trends & Budgetary Estimates

Receipts & Expenditure:

• In 2023-24, revenue receipts were ₹27.3 Lakh CR, rising to ₹31.3 Lakh CR (BE) for 2024-25.
• Effective CAPEX fell from ₹17.1 Lakh CR to ₹16.3 Lakh CR (RE). Revenue EXP increased from ₹34.9 Lakh CR to ₹37.0 Lakh CR (RE).
• CAPEX rose from ₹12.5 lakh CR to ₹15.0 lakh CR (BE) but was later revised to ₹13.2 lakh CR

Deficit Trends (as a % of GDP):

• Fiscal deficit was 3.3% in 2023-24, & estimate for 2024-25 (RE) remains unchanged at 3.3%.
• Revenue deficit was 0.3% in 2023-24, which increased slightly to 0.8% in 2024-25 (RE).
• Total Transfers to States & UTs: In 2023-24, the total transfers to States & UTs amounted to ₹20.65 Lakh CR. This figure was revised to ₹22.76 lakh CR in 2024-25 (RE) & is projected to increase further to ₹25.60 lakh CR in 2025-26 (BE).
• Net Receipt of Central Govt: Net tax revenue collected by the Centre in 2024-25 (RE) was ₹28.4 lakh CR, while non-tax revenue stood at ₹5.8 lakh CR.
• Additionally, non-debt capital receipts, which include disinvestment proceeds & recoveries of loans, amounted to ₹0.8 lakh CR in 2024-25 (RE).

Major Central Govt Expenditure (Budget Estimates):

• It’s really worrisome that EXP on EDUCATION is reducing Developing countries should spend 6-7% of GDP on Education During UPA period (upto 2013) this was 4,57% & now down to 2.53%
• How can we take advantage of Human Capital if spending on Education is Tapering ?

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Union Budget in nutshell

Four Engines of Development in Union Budget 2025-26

1st Engine- Agriculture:

• PM Dhan-Dhaanya Krishi Yojana: Announced to cover 100 low AG productivity dists, benefiting 1.7 CR farmers, enhancing irrigation, & post-harvest storage facilities.
• A ‘Rural Prosperity & Resilience’ program will be launched with states to address AG under-employment thro’ skilling, investment, & technology.
• Atma Nirbharta in Pulses: A 6-year mission focusing on Tur, Urad, & Masoor launched, ensuring climate-resilient seeds & remunerative prices.
• Central agencies (NAFED & NCCF) will procure these 3 pulses from farmers over next 4 years
• National Mission on High Yielding Seeds: To strengthen research, ensuring availability of 100+ high-yielding & pest-resistant seed varieties.
• Mission for Cotton Productivity: A 5-year initiative promoting sustainable farming, increasing extra-long staple cotton production, & improving quality.
• Enhanced Kisan Credit Card (KCC) Limit: Raised from ₹3 Lakh to ₹5 Lakh to facilitate credit flow for 7.7 CR farmers.
• Comprehensive Program for Fruits & Vegetables: To promote efficient supply chains & ensure better market prices for farmers.
• Makhana Board in Bihar: To be established to enhance production, processing, & value addition of Makhana.
• Fisheries Development: New framework for sustainable fishing in Indian Exclusive Economic Zone & High Seas, focusing on Andaman & Nicobar & Lakshadweep.
• Urea Plant in Assam: A new urea plant in the premises of Brahmaputra Valley Fertilizer Corporation Ltd (BVFCL) with 12.7 Lakh MT capacity to boost AG productivity.

2nd Engine- MSMEs:

• Revised MSME Classification: Investment & turnover limits increased up to 2.5 times, expanding credit opportunities for small businesses.
• Limits: enhanced from 🡪 to
• Micro: Investment: 1 CR 🡪 Rs 2.5 CR Turnover: 5 CR 🡪Rs 10 CR
• Small: Investment: 10 CR 🡪Rs 25 CR Turnover: 50 CR 🡪 Rs 100 CR
• Medium: Investment: 50 CR 🡪 Rs 125 CR Turnover: 250 CR 🡪 Rs 500 CR
• Micro Enterprise Credit Cards: Rs 5 Lakh credit facility for 10 Lakh micro enterprises, promoting financial inclusion & economic participation.
• Credit Cover for MSMEs: Guarantee cover increased from ₹5 CR to ₹10 CR, enabling higher loan access.
• Focus Product Scheme for Leather & Footwear: Expected to generate 22 lakh jobs and ₹4 Lakh CR turnover, & exports of over ₹ 1.1 Lakh CR.
• Toy Sector Development: Clusters & innovation-based manufacturing fostering 'Made in India' brand in global markets.
• National Institute of Food Technology: A National Institute of Food Technology, Entrepreneurship & Management to be established in Bihar, promoting food processing, skilling, & entrepreneurship.
• Fund of Funds for Start-ups: To be established with an expanded scope & an additional contribution of ₹10,000 CR.

3rd Engine- Investment

• Urban Challenge Fund: ₹1 lakh CR allocated to support ‘Cities as Growth Hubs,’ ‘Creative Redevelopment of Cities,’ & ‘Water and Sanitation,’ with ₹10,000 CR allocated for 2025-26.
• Jal Jeevan Mission: With TTL budget outlay enhanced to Rs 67,000 CR & extension till 2028, ensuring universal piped water coverage with enhanced funding for rural water projects. 15 CR H/H representing 80% of India’s rural population have benefitted by the mission.
• Maritime Development Fund: ₹25,000 CR fund (49% contribution by GOI), supporting long-term financing for shipbuilding, ports, & logistics infrastructure.
• Expansion of IITs: Additional infrastructure for 6,500 more students, boosting India’s technical education capacity.
• PM Research Fellowship: 10,000 fellowships for advanced research in IITs & IISc.
• Day Care Cancer Centers: To be set up in all Dist hospitals in the next 3 years, with 200 Centres in 2025-26, ensuring affordable cancer treatment accessibility.
• Bharatiya Bhasha Pustak Scheme: Digital Indian language books to enhance school & higher education accessibility.

• Nuclear Energy Mission for Viksit Bharat: To be set up with a ₹20,000 CR outlay for Small Modular Reactors (SMRs), with at least 5 indigenously developed SMRs operational by 2033.
• Amendments to Atomic Energy Act & Civil Liability for Nuclear Damage Act will be taken up for active partnership with the private sector.
• UDAN - Regional Connectivity Scheme: A revised UDAN scheme will enhance regional connectivity to 120 new destinations, aiming to carry 4 CR passengers over the next 10 years. It will also support helipads & smaller airports in hilly, aspirational, & NE regions.
• Greenfield Airport in Bihar: Greenfield airports will be developed in Bihar, alongside the expansion of Patna airport & a brownfield airport at Bihta (Patna).
• Western Koshi Canal ERM Project: Financial support for irrigation infrastructure in Mithilanchal, Bihar.
• Tourism for Employment-led Growth: Top 50 tourist destinations across the country will be developed in partnership with states thro’ a challenge mode

4th Engine- Export Promotion:

• Export Promotion Mission: It will be established, with sectorial & ministerial targets, led collaboratively by Ministries of Commerce, MSME, & Finance.
• BharatTradeNet (BTN): A unified digital platform facilitating international trade documentation & financing solutions.
• National Framework for GCC: Policy incentives to promote outsourcing hubs (Global Capability Centres) in emerging Tier-2 cities.
• Warehousing Facility for Air Cargo: Development of storage infrastructure for high-value perishable exports.

Some IMP observations

• GDP Growth needs to be more than 8% if India wants to be a developed country . But for last 10 years the GDP growth has been less than 6%
• GOI spending almost 20% of Revenue on paying interest on loan (debt). Income is 22% from Income tax & 18% from GST, 17% Corporate Taxes)
• Outstanding internal & external debt and other liabilities of GOI at the end of 2025-2026 is estimated to Rs 196,78,772.68 CR, as against Rs 181,74,284.36 CR at the end of 2024-2025 (RE).
• 15 L CR New debt proposed in FY 25-26 (i.e. about Rs 200 L CR TTL debt & Income is Rs 50 L CR in a year)
• Reduction in Revenue receipt: Rs 41,240 CR
• Reduction in Tax Receipt: Rs 26,349 CR
• Reduction in CAPEX: 92,682 CR
• Reduction: Health: Rs 1255 CR, Education: Rs 11,584 CR
• Reduction: Social Welfare: Rs 10, 992 CR,
• Rural Development: Rs 75,133 CR Urban Development: Rs 18,907 CR, North East Development: Rs 1894 CR

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Reduction:

• PM Anusuchit Jati Abhyuday Yojana: Rs 1340 CR
• PM Young Achievers’ Scholarship Award Scheme for vibrant India for OBCs, EBCs, DTNTs (PM Yashasvi): Rs 455 CR
• Post Matric Scholarship for SCs: Rs 860 CR
• Program for Development of STs: Rs 670 CR
• PM Awas Yojana (Urban) : Rs 16,501 CR
• PM Awas Yojana (Rural) : Rs 22,047 CR
• Jal Jeewan Mission: Rs 47,469 CR
• Jal Jeevan Mission Extended till 2028 to achieve 100% coverage. 2028 with focus on the quality of infrastructure and O&M of rural piped water supply schemes through “Jan Bhagidhari”.
• Employment Development Schemes: PLI Scheme for MEITY: Rs 423 CR & PLI Scheme (Auto): Rs 3153 Cr, Skill India Program: 60 CR, New Employment Generation Scheme: Rs 3201 CR
• Woman & Child development Scheme: PM Poshan Shakti Nirman: Rs 2467 CR, Saksham Anganwadi & Poshan : Rs 1129 CR
• Mission Vatsalya (Child Protection Service & Child Welfare Service: Rs 81 CR, Mission Shakti: 1695 CR

Biggest Declines: Ministries with the Highest Budget Cuts

• Ministry of Steel: steepest decline, with a 61% budget cut from Rs 8,561 CR to Rs 3,362 CR.
• Ministry of Communications: budget reduced by 28%, from Rs 1,50,201 CR to Rs 1,08,105 CR
• Ministry of Law & Justice – 23% reduction in budget from Rs 7,604 CR to Rs 5,850 CR
• Ministry of External Affairs (including Overseas Indian Affairs): 19% cut, with its budget decreasing from Rs 25,277 CR to Rs 20,517 CR.

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Major Energy Sector Policy Initiative Announcements

• In line with achieving Target for Net-Zero by 2070, following Policy Reforms aimed at promoting NUC energy adoption announced.
• 100 GW Target for NUC sector for 2047
• Increased Private Sector Participation in setting up NUC capacities by amending Atomic Energy Act & Civil Liability for Nuclear Damage Act
• Setting up Nuclear Energy Mission for R&D of Small Modular Reactors (SMR) with an Outlay of Rs 20,000 CR outlay
• Target of Installation of at least 5 indigenously developed SMRs that will be operationalized by 2033
• Rs 20,000 CR allocation for NUC energy & proposed legislative reforms demonstrate forward-thinking approach to Energy Security & Decerbonisation
• Policy Reforms for Strengthening Electricity Dist & Trans sectors
• To Incentivize Dist Reforms & Augmentation of Inter-state Trans (ISTS). Thro’ Additional borrowing incentives of 0.5 % of GSDP for States to undertake reforms in Power Dist Sector
• Increased Allocation for Reform Linked Dist Scheme (RDSS)
• Emphasis on Increased Clean energy usage by conventional businesses.
• Big Focus on Clean Manufacturing: Green Manufacturing of EV, Solar, & Grid Equipment (Solar Cells, EVs , Controllers, Ecosystem for Solar)
• Exemption / Tax benefits: Cut on Basic customs duty on Lithium Batteries for Mobile phones & Batteries, EVs , Solar Systems. Import of Critical Minerals made easier
• EVs, LED, LVD, Lithium Batteries, Solar System equipment: would be cheaper

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Power Sector in Union Budget

• TTL Allocation for Energy Sector: Rs 81,174 CR (Rs 68,769 CR in FY 2024-25)
• FM has allocated Rs 48,396 CR towards Power sector, including RE. The outlay is an increase of 30% over FY 24-25’s allocation of Rs 37,143 CR (revised estimate) & 22% over the budget estimate of Rs 39,602 CR
• Power Ministry received Rs 21,847 CR & Ministry of new & RE (MNRE) Rs 26,549 CR,
• The biggest share of Rs 16,021 CR from MOP funds went to the Revamped Dist sector scheme, a key component of which is prepaid smart metering, system metering, & Dist infrastructure upgrades. The scheme received Rs 12,665 CR (RE) in the FY25 Budget.
• Trans sector got Rs 850 CR, a decline from the Revised Estimate of Rs 1,815 CR in FY25. At the same time, Rs 600 CR has been kept aside for Green Energy Corridors (GECs) meant for evacuation of RE & integrating it with National Grid. (Rs 600 in the FY25 revised estimate as well)

• GOI's flagship rooftop solar scheme: PM Surya Ghar: Muft Bijli Yojana: got Rs 20,000 CR, up by 80% from Rs 11,100 CR (RE).
• Surya Ghar scheme got bigger budgetary support to ensure its faster implementation to meet RE targets.
• National Green H2 Mission (NGHM) received Rs 600 CR, compared to Rs 300 CR (RE) in FY25.
• GOI approved NGHM on Jan 4 2023, hoping to become a leading producer & exporter of green H2 by hitting an annual production of 5 MMT by 2030.
• PM-KUSUM scheme (PM Kisan Urja Suraksha evam Utthan Mahabhiyan) got Rs 2,600 CR, against Rs 2,525CR (RE) in FY 25.
• PM-KUSUM is one of the largest initiatives in the world to provide clean energy to more than 35 Lakhs farmers by solarising their AG pumps.
• Ministry of Petroleum & Natural Gas (MoPNG)–Rs 19,326 CR (Rs 15,930 CR (in 2024-25)
• Ministry of Coal allocation hiked by 255% from Rs 141 CR to Rs 501 CR, the coal sector is set to receive a significant boost.
• Budget Provision for MoEF (ENV/ Climate change Ministry ) Rs 3.412 CR
• Biofuel sector – Rs 250 CR/ LPG Subsidy cut
• Big blow to Wind Sector, allocation drops by 37.5%/ Strategic Oil Reserves– Rs 5,876 CR
• because of the reduction in requirement for Generation-based incentive, which is paid out to wind power projects commissioned prior to April 1, 2017,

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Customs duty / Excise Duty Reduction / Tax Reduction:

Basic Customs Duty (BCD) on Specified capital goods for manufacturing Lithium-ion battery cells for EVs and Mobiles

• Fully Exempt Critical Minerals from Customs duty: Cobalt Powder & waste, Waste & Scrap of Lithium-ion battery, Waste and Scrap of Lead, Zinc, & Other 12 Critical Minerals like Antimony, Beryllium, Bismuth, Cadmium, Cobalt powder, Lithium, Molybdenum, Rhenium,
• Li-Ion Battery: 35 additional capital goods for EV battery manufacturing, & 28 additional capital goods for mobile phone battery manufacturing will be added to the exempted Capital Goods List.
• The budget’s focus on energy storage is particularly laudable. By offering duty exemptions on critical minerals like cobalt, lithium, and zinc, & adding capital goods for EV and mobile phone battery manufacturing to the duty-exempt list, GOI has taken a decisive step toward building a resilient energy storage ecosystem. This will not only bolster India’s EV industry but also enhance grid stability, enabling higher RE penetration.
• Goods Likely to be Cheaper: EV & Mobile Li-ion Batteries/ Critical Minerals/ Solar Panels / Solar Modules

Mjaor Missed Opportunities from Budget FY 2025-26:

• Decarbonisation, Green Finance & ESG Reforms
• Less Budgetary allocations for Wind and Green Hydrogen Sectors
• No Announcement for EV Sector Support / Incentives (FAME)
• No Budgetary allocations for Energy Storage, Pumped Storage Sector
• No mention or provision for Climate Change efforts
• No Announcement for Biofuels sector. Demd for creating Biomass Storage Banks not addressed

Union Budget 2025: Reactor plan not enriched with funds

• FM announced a ₹20,000 CR ‘Nuclear Energy Mission’ to develop indigenous Small Modular Reactors (SMR). Budget proposes that at least five of these reactors will be operationalised by 2033. However, a perusal of the Budget documents suggests no financial commitments towards these this year.
• In her Budget speech July, Ms. FM said that GOI would be partnering with the private sector for setting up Bharat Small Reactors (BSR), R&D of Bharat Small Modular Reactor (BSMR), and R&D of newer technologies for nuclear energy. towards this, amendments to Atomic Energy Act & Civil Liability for Nuclear Damage Act would be made.
• BMR refers to incrementally modified forms of India’s existing Pressurised Heavy Water Reactors (PHWR) whereas BSMR is a nascent technology being researched globally.
• The larger import of FM’s speech is that the future of NUC technology in India lies with the private sector. It is an inversion of how things are today, where the Govt NUC establishment builds, operates, funds reactors. We have seen the limitations of that approach.
• The BSR, the Govt expects, will be built & run by NPCIL but financed by the private players in the power sector. Once experienced with running of such power plants, it is expected that SMRs can be developed by the private sector.

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Big blow to Wind sector as allocation drops by 37.5%

• Union Budget for 2025-26 has provided for a Budgetary allocation of Rs 500 CR for the wind energy sector, a 37.5% drop over the previous Rs 800 CR provided for FY2024-25.
• India currently has the fourth highest wind installed capacity in the world GOI is promoting wind power projects through private sector investment by providing various fiscal & financial incentives.
• GOI thro’ National Institute of Wind Energy, which carries out R&D in wind energy, has installed over 900 wind-monitoring stations all over the country and issued wind potential maps at 50m, 80m, 100m, 120m and 150m above ground level.
• The recent assessment indicates a gross wind power potential of 695.50 GW at 120 met & 1163.9 GW at 150 meter above ground level, according to MNRE.
• There are a total of eight windy states including AP, Guj, Kar, MP, Maha, RAJ,TN, & TEL with TTL Wind capacity of 676.5 GW at 120m and 1,136.7 GW at 150m above ground level.

Budget 2025: Bihar gets Makhana Board, Food Institute, Airports & Canal project: Chunavi REVADIs ??

Dressed in Cream & Red Madhubani Sari featuring Bihar’s Iconic Art FM heaped promises on Poll-bound BIHAR In her Budget presentation (Bihar assembly goes to poll in Nov 2025)

FM announced a slew of schemes for BIHAR.

• A new Makhana Board, National Institute of Food Technology, Entrepreneurship & Management were announced.
• The Board will provide hand holding & training support to Makhana Farmers. The Board will also ensure that farmers will receive all benefits of Govt Schemes
• Greenfield airports will be added in addition to expansion of Patna airport
• Green field Airport will meet future needs of Bihar. In addition there will be expansion of Patna Airport.
• Financial support of Rs 11,500 CR to “West Kosi canal project” in Mithilanchal was also announced, which will benefits farmers cultivating over 50,000 Hectors of land in BIHAR
• “National Institute for Food Tech, Processing & Innovation” would be set up in BIHAR,
• It will provide fillip to entire Eastern India. It will enhance farmers income, add value to produce, skilling & employment opportunities for Youth

India to review tariff surcharges on solar cells, Luxury Cars, may spur US imports (06/02)

• India is set to review import tariffs on over 30 items including luxury cars& solar cells, potentially leading to higher imports from the US, a senior FM official said.
• In a bid to counter President Donald Trump’s growing tariff actions, GOI has already reduced tariffs on several items including high-end bikes, cars, & chemicals in the budget, while imposing additional “Agriculture Infrastructure Development Cess (AIDC)”, an alternative tariff, on many items.

Below is the list of key items on which AIDC tariff could be reviewed:

CUT IN BASIC CUSTOMS DUTIES (BCD)

• Indian budget slashed BCD on several items including luxury cars, solar cells & machinery. The peak import tariff has been cut from 150% to 70%, & average tariffs to below 11% from 13%, while an alternative tariff called AG Infrastructure Development Cess (AIDC), has been raised on certain items.

AGRICULTURE INFRASTRUCTURE DEVELOPMENT CESS

• After reducing peak import tariffs, India has introduced a special list of 32 items, including luxury cars & chemicals, upon which the AIDC tariff of 5% to 70% has been imposed. Earlier there was zero AIDC tariff on these items.
• AIDC is an alternative import tariff, collected by GOI for raising funds in a separate pool, and funds collected are used for building farm infrastructure

LUXURY CARS, MOTOR VEHICLES

• Luxury cars with a CIF (cost, insurance & freight) value exceeding $40,000 attract a surcharge of 40%, along with a reduced BCD of 70%. Transport vehicles & used motor vehicles face an AIDC tariff of 20% & 67.5% respectively, while BCD has been lowered to 20% from 40%. Yachts & sports vessels attract a surcharge of 7.5%.

SOLAR CELLS, MODULES

• Solar cells, modules, & other semiconductor devices attract a surcharge of 7.5% to 20% on top of a reduced import tariff of 20%, down from 25%-40%.

CHEMICALS

• Laboratory chemicals now face a reduced BCD of 70%, down from 150%, along with an AG cess of 70%.

BUILDING MATERIAL

• Marbles, granite & slabs attract a surcharge of 20% on top of 20% BCD of 20%, down from 40%.

HOUSEHOLD ITEMS

• Footwear & materials for manufacturing them face a surcharge of 18.5% while items like bicycles attract surcharge of 15% after a reduced BCD of 20%.
• Home furniture items, smart electricity meters, electronic toy parts attract the surcharge of 5% to 20%.

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The Great Indian Energy Trilogy: Dawn of new power heroes

• If energy interventions of Union Budget 2025-26 were part of a movie series, Li-Ion Batteries, emerge to be the protagonist of this sequel, NUC energy the second lead, & nudge for Dist Reforms to revive the state discoms the foundation for the next chapter in this saga.
• In Part 1 of the movie series: The storyline revolved around India's ambitious quest to achieve 500 GW RE in its energy mix by 2030. Setting up RE capacities & scaling-up was more important at that time to create the momentum.
• Part 2 of the movie series focused on building local manufacturing for solar cells, Li-Ion batteries & electrolyzers thro’ the introduction of PLIs & BCDs. Solar manufacturing was the main hero gaining traction, especially given the robust domestic demand. The share of RE in AI power mix was nearly 20% & EVs are yet to get traction. Batteries were still playing a supporting role as the cost curves were still emerging
• Share of RE in AI power mix surged & making storage a critical element for future energy transition aspirations. RTC, Hybrid power & battery energy storage systems (BESSs) started becoming the norm. EVs also started getting traction witnessing a demand uptick. Every major auto player announced an upping of their EV game.
• Part 3 of the movie was premiered during this budget. (With 3 Heros)

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• First Hero: The spotlight is on DOM manufacturing of Li-ion batteries. It has three superpowers—an extended exemption list for capital goods;
• A refined National Manufacturing Mission: Of course, the champions from earlier installments: solar components manufacturing & other value added RE Components will also be able to leverage these superpowers to overcome import dependancy & global competitiveness
• Second hero: NUC energy, introduced in the trailer, during July 2024 an intent to partner with the private sector to set up Bharat Small Reactors & a strong focus on R&D.
• Latest sequel (Budget 2025) part focuses on setting up specific targets: 100 GW by 2047, five Small Modular Reactors by 2033 and a R&D outlay of Rs 20,000 CR. It also gives it a strategic advantage to draw investment & partnerships from private investors through proposed amendment to Atomic Energy Act & Civil Liability for Nuclear Energy Act.
• While 100 GW by 2047 i.e., around 5% of installed power capacity by 2047) may seem modest, it creates a significant option value for the future & a potential for spin-off in future if the circumstances warrant—such as, increased pressure of global supply chain for critical minerals, emergence of new storage technologies, etc.)
• Third Hero: Surprise introduction of an incentive for State Govts— allowing an additional borrowing of 0.5% of GSDP, if they undertake electricity Dist reforms & ISTS is an interesting twist to the plot. It also sets up an interesting platform for next sequel or perhaps a spin-off—The Electricity Amendment Bill which has been on the production for some time)

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Budget 2025: A Missed opportunity for decarbonisation, Green finance, & ESG reform: Experts’ views

• The Victory of Donald Trump as President of the US seems to have not just shifted priorities in the US but also across the world, especially with areas like climate change and decarbonisation seeming to have taken a back seat.
• Union Budget 2025-26, seems to have given a miss to areas like decarbonisation & green transition, having no major breakthrough announcements for the same. It has failed to align with a broader decarbonisation strategy.
• Except for the boost given to NUC energy & a few mentions of promoting green tech manufacturing under National Manufacturing Mission, nothing substantial was announced for this area, especially considering the kind of green transition India is looking to go through.
• Previous years’budgets have made announcements about retiring coal power plants & co-firing, Green H2 Mission, Indian Carbon Markets, rebates on EVs & many such initiatives. These announcements, though not consolidated, sent out a message that GOI is taking steps towards decarbonisation of the economy

• Key sustainability issues: Waste Management, coastal resilience, & Biodiversity are missing from Output Outcome Framework for 2025-26. India’s economic growth must not come at the expense of environmental collapse.
• Targeted initiatives addressing Air pollution, River rejuvenation for water security, & adaptation measures beyond AG would have further reinforced India’s vision for a cleaner & greener future.
• While Budget mentions boosting AG production & resilience, it has no mention adaptation funding “Without real investment in climate adaptation, farmers will be left defenceless against increasingly erratic & extreme weather. The livelihoods of millions are at serious risk &, without urgent action, our food systems & rural communities will bear the brunt of the climate crisis."

• But 2025 budget speech is devoid of the words ‘CARBON’ as well as ‘Smart City Project’
• This is not a good sign, especially when various entities from different sectors of our country are making strides to decarbonise & transition towards cleaner production & services to keep pace with the global green transition.
• In Green Transition there are several areas that require focus & support in terms of policy as well as finance & should be part of India’s budget allocations & planning e.g:
• Support for accelerating RE gen: Although our RE capacity seems to be increasing year on year, gen from RE has been low. There are barriers in accelerating the share of RE gen, these barriers need to be addressed with the help of appropriate policies, incentives & financial support.
• Support schemes for transitioning emission intensive MSMEs: Contribution of MSMEs to our economy is immense, but there are a number of emission-intensive MSMEs like brick kilns & metal INDs that need to shift towards cleaner production & would require focused sectoral support.
• More support for scaling alternate cleaner fuels: Several alternate fuels like biochar, biofuels, refused derived fuels & others need support for scaling up

• Support for carbon abatement technologies:. For instance, technologies like Carbon Capture, Utilisation & Storage (CCUS) are being looked at as a significant abatement technology for decarbonisation of hard-to-abate sectors across the world & developed economies have been providing various forms of incentives & infrastructure to INDs for its uptake.
• But India currently lacks any policy on CCUS & also the utilisation scenario seems to be economically unviable on the ground. Therefore, it becomes essential to have a policy around it, understand its viability in Indian context & support or incentivise IND players to be able to take up this technology for decarbonisation (if found feasible).
• Building ecosystem for waste circularity: Waste circularity is an essential co-beneficial approach for decarbonisation & many other problems we face today. It is important to build formalised ecosystems for different waste streams that could play a huge role as alternate raw materials or fuels in decarbonisation & green transition.
• Budget did mention revamping the ship breaking facilities of India, but numerous other waste streams still await the required ecosystem & support to be able to be used as a resource.
• Pushing domestic demand for low carbon products: Recently, India became the first country to define “green steel”, but to make initiatives like these a success, it is essential to have substantial demand for these green products.
• These efforts remain fragmented across different ministries & the absence of a dedicated mission body to integrate & steer India’s green transition remains a critical gap.

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• IND decarbonisation, in particular, demands stronger Govt engagement. The sector needs not only technological innovation but also targeted policy support both for supply as well as demand side: such as financial incentives, tax benefits on greener alternatives (like lower GST on low-carbon products) & much more.
• Many such measures were overlooked in this budget. Additionally, Govt’s ambition to achieve 100 GW NUC power by 2047 raises an interesting question about its role in IND energy supply & whether it is being eyed as a key enabler of deep decarbonisation in IND sector? If yes, how feasible will that be?
• To truly decarbonise India’s economy, a coherent & sector-specific approach is essential: one that combines strong policy signals, financial accessibility & IND innovation. While India has begun to take crucial steps, a comprehensive strategy that aligns all initiatives & sectors toward a low-carbon future is the need of the hour.

The success of this transition will not only determine India’s ability to meet its climate goals but also define its global competitiveness in a decarbonising world. We cannot afford such missed opportunities anymore.

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Thanks!!!�(Contact me: vlsonavane@gmail.com/M: 98333 62062)

“EXPERT is a Person who comes from out side &

Expertise is directly proportional to the distance traveled by him”

“ Since Feb 2019, I cannot travel; hence by definition, I am not an EXPERT”