Union Budget 2023 | Reaction from N Venu, MD and CEO, India and South Asia, Hitachi Energy
India needs commensurate infrastructure development to reach its goal of becoming a 5 trillion economy. Over many years, the governments have been investing in capex, pumping the much-needed energy to keep the economy sanguine.
This is well reflected in the Economic Survey of 2022-23; Capital Expenditure (Capex) of the central government increased by 63.4 percent in the first eight months of FY23, which has been 4.5% of GDP.
The recent announcement towards Energy transition with earmarking Rs 35k core for priority capital towards net zero and energy security, is a welcome step. However, there should be at boosting infrastructure investments and incentivize manufacturing to support the Atmanirbhar Bharat campaign while cementing our positing on the global map enabling the country to become a crucial link in the worldwide supply chain.
India aims to produce 50% of its energy from renewables by 2030. As per government data, we are already at more than 40% of the defined goal with more than 170 GW of capacity from non-fossil sources, putting us at 4th rank in the world at the close of 2022.
The transition toward renewable energy sources presents a significant opportunity for India to add value. The slew of announcements towards Inter-State Transmission System, energy transition, battery energy storage system of 4000 MWH and extending the support to the states for bringing green growth are encouraging and set ambitious goals for supporting Carbon-neutral future which has been one of the priorities in this budget.
Electric and smart mobility is the future, and the union budget allocation of Rs 2.40 lakh crore towards capital outlay for Railways, which has been the highest ever outlay, nine times of FY13-14 outlay, will support railways sector to encourage the acceptance of smart technology and further the country’s vision of complete electrification of India Railways.
Staying on the green course
This budget outlines an integrated ambition using physical and digital platforms to build on the foundation laid last year and accelerate towards an overall structural transformation. Sizeable government capex commitment – at 4.5% of GDP, including the largest ever allocation to rail – is aimed to crowd in private investments in further strengthening of infrastructure across rural, urban & digital India. This, along with measures towards improving investor confidence, will eventually drive inclusive Green Growth, helping reduce India’s carbon intensity and creating green jobs.
Focus on green energy transition shines through with allocations for green hydrogen, energy storage, building next generation talent, etc. While we await measures towards better managing state-level T&D networks, the government’s vision to develop long-gestation ISTS to evacuate & integrate bulk solar power, before setting up fast turnaround solar power plants is a welcome reaffirmation of India’s energy transition.
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