Union Budget 2010 Impact on energy sector

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The various benefits announced by the Finance Minister of India Pranab Mukherjee while presenting the Union budget 2010 in parliament on February 26, 2010 are projected to have a colossal impact on energy sector of India.

Union Budget 2010 Impact on energy sector

The Finance Minister in his speech declared a hike in the monetary incentives for energy sector up to ` 5,130 crore in current fiscal year against the previous ` 2,230 crore. The government also intends to initiate guidelines to establish "Coal Regulatory Authority" which would assist issues such as monetary costing of coal and setting a performance benchmark.

He has also allocated an incentive hike of 61% for the Ministry of New and Renewable Energy from the previous ` 620 crore to ` 1, 000 crore in the current FY. In addition, to deal with the problem of energy shortage in the Ladakh district of Jammu and Kashmir, the minister has suggested establishing of solar plants and other micro power plants at a price of ` 500 crore.

According to the Finance Minister, the government also intends to initiate an aggressive bidding method for assigning coal blocks for caged mining to guarantee better transparency and improved contribution in construction from these blocks.

Other benefits for energy sector proposed in Union Budget 2010
  • 4% of reduction in central excise tariff on LED lights, energy-proficient supply of street, homes and offices lighting.

  • Full central excise tax exemption on electric cars and automobiles that propose to be an eco-friendly substitute to petrol or diesel automobiles.

  • 4% of tariff on such vehicles have been imposed in order to neutralize the tariff paid by the manufacturers of such components.

  • 4% concessional excise tariff on battery-run rickshaws.

Last updated on : 15-05-2011

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