MSMEs ask govt to reinstate wind incentives
Updated: May 17, 2013 02:39:39pm
New Delhi, May 17 (KNN) The Indian Wind Power Association (IWPA) has urged the government on behalf of the small and medium industries to reinstate accelerated depreciation (AD) for installation of wind mills for self-consumption.
The Government of India withdrew AD on April 14, 2012 owing to which wind power generation in the country dropped by 1,500 MW last fiscal. The move has affected the MSME sector which has been unable to invest in cheap energy giving wind mills, said IWPA in a press release.
"The reason for the dip in wind power production is due to removal of AD incentives. IWPA has therefore urged the government to restore AD. Further, generation based incentive (GBI) is only for those who want to sell energy and we are not going to do so, we will use it," IWPA Chairman K Kasthurirangaian told KNN here.
AD, according to the chairman, is based on investment. If a company invests Rs 100 then it can take back Rs 80 as tax incentive. Under the scheme for wind power, a GBI (Generation Based Incentive) of 50 paise per unit of electricity fed into the grid is provided for a period not less than four years and a maximum period of 10 years.
AD also enables the MSME industries to use the profits in their industries to pay initial advance/margin money for ordering wind mills. The balance cost is borrowed from the bank.
"We have been working with the Ministry of New and Renewable Energy for the past year on the issue and now they are convinced that a generation loss of 1,500 MW was there," he said.
He also added that reinstatement of GBI had been announced during the Budget 2013-14. However, its form and structure are yet to be announced.
According to reports the incentives were scrapped last year as many developers took incentives to save tax and after the completion of incentives either neglected or abandoned the wind farms altogether.
“It was a miscalculation. Now the government is losing more, on both growth and employment.….” he said.
Reiterating the need for reinstatement of wind incentives, “The MSME ministry should stand by us at this point of time and get the AD reinstated,” said Kasthoorirangaian.
Given that Indian products are better in quality, if produced using wind energy, they would be cheaper too, he added. This would help the MSME sector in India to compete with the Chinese in the world market and earn a comfortable margin. Currently, many MSMEs were selling successfully in 50 to 60 countries regardless of the Chinese competition. (KNN)
The Government of India withdrew AD on April 14, 2012 owing to which wind power generation in the country dropped by 1,500 MW last fiscal. The move has affected the MSME sector which has been unable to invest in cheap energy giving wind mills, said IWPA in a press release.
"The reason for the dip in wind power production is due to removal of AD incentives. IWPA has therefore urged the government to restore AD. Further, generation based incentive (GBI) is only for those who want to sell energy and we are not going to do so, we will use it," IWPA Chairman K Kasthurirangaian told KNN here.
AD, according to the chairman, is based on investment. If a company invests Rs 100 then it can take back Rs 80 as tax incentive. Under the scheme for wind power, a GBI (Generation Based Incentive) of 50 paise per unit of electricity fed into the grid is provided for a period not less than four years and a maximum period of 10 years.
AD also enables the MSME industries to use the profits in their industries to pay initial advance/margin money for ordering wind mills. The balance cost is borrowed from the bank.
"We have been working with the Ministry of New and Renewable Energy for the past year on the issue and now they are convinced that a generation loss of 1,500 MW was there," he said.
He also added that reinstatement of GBI had been announced during the Budget 2013-14. However, its form and structure are yet to be announced.
According to reports the incentives were scrapped last year as many developers took incentives to save tax and after the completion of incentives either neglected or abandoned the wind farms altogether.
“It was a miscalculation. Now the government is losing more, on both growth and employment.….” he said.
Reiterating the need for reinstatement of wind incentives, “The MSME ministry should stand by us at this point of time and get the AD reinstated,” said Kasthoorirangaian.
Given that Indian products are better in quality, if produced using wind energy, they would be cheaper too, he added. This would help the MSME sector in India to compete with the Chinese in the world market and earn a comfortable margin. Currently, many MSMEs were selling successfully in 50 to 60 countries regardless of the Chinese competition. (KNN)
Loading...
