Wind power association asks Fin Min to re-instate fiscal incentives
Updated: Jul 25, 2013 02:20:32pm
From Swati Dayal
Chennai, Jul 25 (KNN) The Indian Wind Power Association (IWPA) has asked the government to restore two fiscal incentives to help companies invest in the clean energy sector. The twin incentives, Accelerated Depreciation (AD) and Generation-Based Incentive, were rolled back by the government in April last year.
India invested around Rs 19,200 crore to add 3,200 Megawatt (Mw) wind power capacity in 2011-12, becoming the fifth-largest wind energy developing nation in the world. However, addition of wind-based capacity declined 46 per cent to 1,700 Mw in 2012-13.
“Investment of Rs 9,000 crore and installation of 1,500 Mw vanished last year,” IWPA Chairman, K Kasthurirangaian said in the July 20 letter to finance ministry’s advisor Parthasarathy Shome.
The letter also identified lack of incentives as a reason for the decline in investments by small scale industries and IPPs in the wind power sector.
“The 5,000 Mw equipment and spares manufacturing industry had no orders and has collapsed since April 2012. The ever-vibrant wind power sector is a lame duck now,” Kasthurirangaian added.
Accelerated Depreciation, a form of direct tax benefit, was phased out to link incentives to actual generation of power through GBI rather than asset creation and tax savings. Under the scheme, investors enjoyed benefit of up to 80 per cent of the project cost for devices like wind mills and solar cookers. An investor availing AD benefit was not allowed incentive under the GBI scheme. With the entry of Independent Power Producers (IPPs) in the market, GBI was introduced in 2009. Under the scheme, an incentive of 50 paise is provided for every unit of electricity generated.
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, IWPA chairman said. (KNN)
Chennai, Jul 25 (KNN) The Indian Wind Power Association (IWPA) has asked the government to restore two fiscal incentives to help companies invest in the clean energy sector. The twin incentives, Accelerated Depreciation (AD) and Generation-Based Incentive, were rolled back by the government in April last year.
India invested around Rs 19,200 crore to add 3,200 Megawatt (Mw) wind power capacity in 2011-12, becoming the fifth-largest wind energy developing nation in the world. However, addition of wind-based capacity declined 46 per cent to 1,700 Mw in 2012-13.
“Investment of Rs 9,000 crore and installation of 1,500 Mw vanished last year,” IWPA Chairman, K Kasthurirangaian said in the July 20 letter to finance ministry’s advisor Parthasarathy Shome.
The letter also identified lack of incentives as a reason for the decline in investments by small scale industries and IPPs in the wind power sector.
“The 5,000 Mw equipment and spares manufacturing industry had no orders and has collapsed since April 2012. The ever-vibrant wind power sector is a lame duck now,” Kasthurirangaian added.
Accelerated Depreciation, a form of direct tax benefit, was phased out to link incentives to actual generation of power through GBI rather than asset creation and tax savings. Under the scheme, investors enjoyed benefit of up to 80 per cent of the project cost for devices like wind mills and solar cookers. An investor availing AD benefit was not allowed incentive under the GBI scheme. With the entry of Independent Power Producers (IPPs) in the market, GBI was introduced in 2009. Under the scheme, an incentive of 50 paise is provided for every unit of electricity generated.
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, IWPA chairman said. (KNN)
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