India give energy budget a boost

India's Energy Budget

The Indian has decided to increase its renewable energy sector budget by 61 percent, from Rs6.2 billion to Rs10 billion in what comes as a clear sign that the nation is ready to commit to popularising clean energy technology.

Finance Minister Pranab Mukherjee said while presenting the 2010-11 budget in the parliament on Friday, "In pursuance of government's resolve to implement the National Solar Mission, I propose to provide a concessional customs duty of 5 percent to equipment required for the initial setting up of solar thermal power generating units."

Other steps have also been taken to ensure the development and deployment alternative energy sources and energy efficient devices are encouraged, such as cutting the excise duty on LED to the same as fluorescent lamps, four percent.

In addition, electric cars and vehicles that offer eco-friendly alternatives to petrol to diesel have been excused from central excise duty all together.

"The manufacturers of such vehicles have expressed difficulty in neutralising the duty paid on their inputs and components. I propose to remedy this by imposing a nominal duty of four per cent on such vehicles," Mukherjee said. The budget also provided a concessional excise duty of four percent battery-run rickshaws.

"Moving beyond oil "

The news came at the same time India announced it expects the economy to rebound to nine percent annual growth within two years and that it is eager to expand energy ties with Saudi Arabia in order to drive economic recovery forward.

During a meeting he squeezed in between two rounds of talks on Saturday with Saudi Oil Minister Ali Al Naimi, visiting Indian Prime Minister Manmohan Singh urged Saudi businessmen to invest more in India's energy, agricultural, tourism and telecommunications sectors.

The two countries already have close links with two million Indian workers in Saudi Arabia - the majority of whom work in the services industry - providing India with the second-biggest source of remittances after the US.

Singh, the first Indian prime minister to visit Saudi Arabia in almost 30 years, said Indian companies are well-placed to develop the country's economy.

"We believe that conditions are ripe for moving beyond a traditional oil buyer-seller relationship to a comprehensive energy partnership," Singh told the gathering.

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