Budget 2023-24: Responses from Clean Energy and Technology Industries

The Union Budget 2023-24 has garnered positive response from various industries stakeholders, especially for its impetus on specific measures towards net-zero goals and green energy transition. 

Here is what the clean energy and technology industry executives have to say about the latest budget: 

This is a forward-looking and growth oriented budget that has addressed many of the suggestions provided by the clean energy industry. I am confident that this will give a boost to domestic manufacturing of advanced energy storage technologies with the relaxation of customs duty for manufacturing equipment, aid in demand creation through VGF for BESS, and support for green hydrogen to support almost 50 percent Green Hydrogen demand by 2030.

We hope that the funds for scrapping of old vehicles and ambulances owned by government agencies will be used for transitioning to e-mobility. Focus is also on skill development, which is essential for enabling the clean energy transition.

Dr. Rahul Walawalkar, President, IESA.

RELATED: IESA lauds Budget 2023-24 as forward-looking and growth-oriented

The Honourable Finance Minister made some massive announcements to help India make a successful transition to green energy, which is an encouraging move toward a more sustainable future. Making EVs more cost-effective by cutting down on imports of Lithium-Ion batteries is a great step. However, domestic manufacturing companies had been anticipating Government aid and resources towards the ancillary industries of the energy sector. The Viability Gap Funding (VGF) backing for battery power storage plans and the reduction in the importation of batteries are required to make us Atma Nirbhar in our energy needs.

Vikram Handa, MD, Epsilon Carbon

The ₹ 35,000 crore priority capital investment for green energy is very encouraging,  and puts India in lines with major countries investing into the energy transition. But I also think import duty for lithium as a raw material had to be removed to encourage ACC manufacturers and their suppliers in the country.

Anjani Sri Mourya Sunkavalli, Co-Founder, Allox Advance Materials

Okinawa Autotech welcomes the government's focus on sustainable growth under the spirit of Amrit Kaal. The elaborate focus on capital expenditure, infrastructure development, green growth, rural development health, education and skilling will support the nation to play a dominant role in the new world. We compliment Finance Minister for providing a big boost to green mobility. The reduction of indirect taxes from 21 to 13 percent as well as exemption on custom duties on capital goods and machinery required for the manufacture of lithium-ion cells will lead to faster adoption of electric vehicles in the country. This will further aid the development of an efficient EV ecosystem.

Further, the push for the scrappage policy will support the overall growth of the entire automobile sector. The budget outlays the strong foundation for India's long-term vision under 'panchamrit' and net-zero carbon emission goals for 2070 to usher in a green industrial and economic transition. We also believe that the relief in personal income tax will improve the consumer confidence & purchasing power in the country.

Jeetender Sharma, Managing Director and Founder, Okinawa Autotech

The budget has envisioned a constructive growth story for India's future. The increased focus on infrastructure investment whether via a 33 percent hike in the capital investment outlay or continuation of 50-year interest free long-term bonds for the next fiscal is a conscious effort to building a strong base for future growth. We welcome the continuous and dedicated effort on futuristic India @100, especially the emphasis on promoting green power and its evacuation, development of a detailed framework for pumped storage projects or looking to deliver 24x7 power with an ambitious VGF funding for 4000 MWh worth of battery based energy storage projects. This will further promote investment in energy sector in the country, while meeting sustainable energy goals the country will need to meet around its 100th anniversary of independence.

However, we hoped to see clarity on implementation of NMP and NIP as envisaged in earlier budgets. While guidelines for monetization have been notified at a broader level, monetization process is yet to pick steam. We further hoped that this budget would streamline long term capital gain taxation of business trusts in line with listed equities, since securities transaction tax (STT) is already applicable to business trusts. This would have only helped promulgate business trusts further as an investment choice, especially for retails and domestic institutional investors.

Harsh Shah, CEO, IndiGrid

The Union Budget 2023-24 is pro-development, with sustainable planning; energy transition for a cleaner tomorrow and inclusive growth through tech-enabled economy at its core. Moreover, the impetus on the EV sector in budget is quite encouraging for all Industry players. Drawing from its core, the decision to exempt Lithium-ion cells of custom duties for another year is a welcome move, as its majorly impacts the affordability of EVs in India.

Furthermore, the viability gap funding announced to support the Battery Energy Storage Systems, along with a framework of Pumped Storage Projects, is designed to reduce the revenue required to recover costs and offer better returns, especially for the Private sector.

Anshul Gupta, Managing Director, Okaya Electric Vehicles

The Auto industry is fully aligned with the initiatives on Sustainability and Decarbonization and increased focus on Hydrogen, Ethanol Blending, Bio Gas, Electric Vehicles and Battery Storage. Announcement for funding various Government Departments for replacement of old vehicles is also commended.

Another appreciable feature of the budget is putting more money in the hands of the individuals by some lowering of effective personal income tax rates that should increase consumption and consequently lead to more demand. All in all, this is a growth-oriented budget with positive impact on the Auto Sector.

Vinod Aggarwal, President, SIAM. Also the MD and CEO, VECV. 

The budget is a blueprint of a digitally enabled, Aatmanirbhar Bharat, coupled with measures that will drive sustainable yet inclusive growth at a rapid pace. Focus on exports, manufacturing, local value addition and encouraging green energy and mobility are indeed steps in the right direction. Further, the proposals for personal Income Tax will put more money in the hands of people thus fueling consumption leading to economic growth.

ACMA is also delighted by the measures announced for skilling and research in hi-tech areas such as AI, Robotics, 5G, Mechatronics and 3D printing, among others. With increasing telematics and software content in vehicles, these measures will ensure that our industry continues to be relevant and globally competitive.

Sunjay J Kapur, President, ACMA

I believe it's a well balanced budget. On one side, there is a supply side push by increasing capital infusion, especially, but not limited to infrastructure sector, and at same time, there is a boost in the consumption side by increasing overall disposable income of the salaried class. This will directly affect 2W sales and lower segments of passenger car industry. Focus is also on startups, MSMEs and green mobility sector. Overall, the budget concentrates on long term sustainable growth of India, which will ensure that we remain as the fastest growing economy in the world.

Jupiter Kalra, Vice President, Mahle India. 

We welcome the forward-looking budget that has rightly been referred to as the vision of Amrit Kaal. This year's budget brings a big boost to the India's economy by covering all the verticals for the holistic development of the nation. The sanctioning of ₹ 35,000 crores for energy transition is a significant step toward India's net zero goals and will undoubtedly provide a much-needed push to a sustainable tomorrow. Tax exemptions on capital goods, lithium-ion batteries, and further reduction of customs duty will accelerate green mobility and rapid transition towards electric vehicles, making the sector stronger than before.

We are eagerly looking forward to the government's ambitious vision for upgrading the EV infrastructure ecosystem. Further relaxation on personal taxes and push for the job creation will bring sustainability in the market and increase purchasing power. Domestic consumption is a prime driving force for the economy. With the infrastructure boost and effective capital expenditure, the industry is optimistic that this budget will definitely augur well for the economic recovery and overall growth of the country."

Yatin Gupte, Chairman & Managing Director, Wardwizard Innovations & Mobility Ltd.

The Union budget for 2023-24 will pave the way for the green empowerment of the country and reflects the progressive attitude of the government toward sustainable development. We welcome the vision of the government of India in establishing and boosting the focus on green growth. As India's new budget envisions 7 priorities, green growth is among the top priorities of it. In its budget, the government has announced a large sum of ₹ 35,000 crore to be allocated towards achieving the net zero goal and energy transition. The government has set its target to reach green hydrogen production of 5 MMT by 2030. This will encourage the private sector involved in green renewable energy-based products to expand their business and invest more in the business of green energy.

The government's green growth efforts will help in reducing carbon impact, promote green alternatives and create space for employment. It will enable the use of green-based products at a larger scale among the common public. The government's green signal to green growth will give an edge to companies like electric vehicle manufacturers to market their products and enhance the opportunities for industry players to cater to their target audiences. This will also help in meeting the carbon offset program of various companies in the green sector.

Akshit Bansal, Founder and CEO, Statiq

We welcome Budget 2023-24 and the government's dedication to promoting environmental sustainability, as stressed by Finance Minister Nirmala Sitharaman. The announcement of the extension of subsidies on Electric Vehicle batteries for 1 more year coupled with the decision to continue the concessional duty on lithium-ion cells for batteries for another year is helpful; however, we look to the government to extend these for 3 years to provide a stable policy environment for the industry.

Amitabh Saran, Founder and CEO, Altigreen

It is heartening to find 'Green Growth' among the seven focus areas of the budget 2023-24. The government's intention to reduce the carbon intensity of the economy and promote green fuel, green energy and green mobility among other practices is commendable.

The allocation of ₹ 35,000 Crore towards achieving Net-Zero goals is a step in the right direction. It will help in getting the viability gap funding for battery storage. With the outlay of ₹19,700 Crores for Green Hydrogen the nation can meet the target of reaching 5 metric million tonnes production by 2030. Further the introduction of green credit programme would encourage businesses to become responsible and sustainable. The customs benefit extended to CNG and the continued exemption on Li-ion battery manufacturing would give a boost to the green mobility sector.

We at Greenfuel are aligned with the government's endeavour of 'Green Growth' and would continue to provide green mobility and green energy solutions to help the nation reduce its carbon footprint and achieve the Net-Zero goal.

Akshay Kashyap, MD, Greenfuel Energy Solutions

I am pleased with our honourable Finance Minister's initiatives. The announcement that "Battery Energy Storage with a capacity of 4,000 MWH would be supported by viability gap funding" is a significant step forward in the co-development of the battery swapping and EV charging ecosystem.National Green Hydrogen Mission will also help to facilitate the transition of the economy, reduce dependence on fossil fuels leading to the growth in the market of technology.

Given the budget's stated goal of encouraging more environmentally friendly modes of transportation, the announcement of ₹ 35,000 crores for the energy transition initiative is encouraging news for the EV sector. It demonstrates the government's intention to prioritise "green growth," which focuses on new technology development.

Ashutosh Verma, Founder, Exalta

The government has brought a progressive budget that will support green mobility and innovation in the automobile sector. Major steps like National Green Hydrogen Mission and extending the subsidy on EV batteries will help the country to have a seamless transition towards a low carbon intensive and fossil fuel dependent economy, empowering the country to achieve its net zero goals.

The three centers of excellence for artificial intelligence to enable 'Make AI for India' and 'Make AI work for India' will stimulate an effective AI ecosystem and nurture quality human resources in the field of technology. It will also boost the Public-private partnership in conducting research and developing cutting-edge applications and scalable solutions across industries. In line with the government's vision of digital India, all these initiatives will help us transform into a digitally empowered society and knowledge economy.

Hitesh Garg, India Country Manager, NXP Semiconductors

Budget 2023 is extremely supportive of the auto industry as India moves forward with the EV revolution. With an emphasis on electrification, lowering import taxes on lithium ion batteries will help lower the cost of EVs and make them more accessible to the general public.

The updated credit guarantee scheme is also welcome news for MSMEs, who are still adjusting to the effects of the pandemic. It will go into effect on April 1st, 2023, with a corpus injection of ₹ 9,000 crore. This will allow for an additional Rs 2 lakh crore in collateral-free credit guarantees, which will allow for a 1 percent reduction in the cost of borrowing.

Also, the minimum tax slab has been raised to ₹ 7 lakh in the new tax regime; this rejig could help bolster disposable income, boosting consumption across segments, including EVs.

Ayush Lohia, CEO, Lohia Auto

The Government's fidelity to reduce carbon footprint in the country has been re-assuring in the Union Budget 2023. The push towards green mobility will propel the growth of the EV sector in India and will encourage further investments. To usher in a green industrial and economic transition, India is committed to achieving net-zero carbon emissions by 2070. With its focus on green growth and push for green mobility, this budget provides the much-needed impetus to the sector.

The Customs Duty exemption on capital goods and machinery to manufacture li-ion will be a facilitator for the country to transition to sustainable and eco-friendly mobility. The exemption will have a domino effect on the overall sector with the over substantial decrease in the overall cost of the finished products wherein the battery packs are likely to reduce by 5 percent coupled with lower initial investments. Additionally, the vehicle scrapping policy will also be beneficial if the old vehicles are replaced by electric vehicles. This will further aid in the country's vision of mass EV adoption by 2030.

The sector also holds immense potential with regards to providing entrepreneurship opportunities and job creation. With decreased capital investments to manufacture ancillary supplies like li-ion batteries, it will provide a platform for new age businesses and entrepreneurs to venture into the space. Overall, we are confident that this Budget will aid in the country's adoption to electric mobility significantly.

Pratik Kamdar, Co-Founder Neuron, Energy

The budget for FY24 announced by FM Nirmala Sitharaman is encouraging on a lot of fronts, especially in the space we operate in. One of the key focus areas is Green Growth and the schemes announced are promising and we welcome the optimism ignited by the Finance Ministry in this space.

These progressive schemes will surely enable rapid electrification in the country and encourage consumers to transition seamlessly towards green mobility which will help OEMs to script a robust growth story in the domestic market. Furthermore, we congratulate the Government of India on laying down its aim of reaching net-zero carbon emissions by 2070. We will work in alignment with the GOI's aim to maximize growth opportunities in shaping a greener tomorrow.

Suhas Rajkumar, Founder and CEO, Simple Energy

This is undoubtedly a future looking announcement which will help India to become one of the prominent players in green hydrogen space and thus reducing the dependency on lithium. With the budget allocated to energy transition we will see a lot of businesses turning to EV fleets. Green credit system will ensure that the startups and MNC's who is working for making the planet a sustainable place to live are incentivized

The viability gap funding will ensure that new battery tech will get supported in the early days before it attains economies of scale. Customs exemption on capital goods and machineries for lithium batteries will reduce the per kilowatt-hour cost of batteries and thus accelerate EV adoption in both personal and commercial segments.

Visakh Sasikumar, CEO and Co-founder, Fyn mobility

With the budget announcement completed, we can see the emphasis on this year's budget on wider adoption of electric vehicles for public as well as private use. The introduction of the National Hydrogen Mission in India is a huge step towards making the country greener and more sustainable.

Government's decision to increase the income tax rebate limit on personal income from ₹ 5 lakh to ₹ 7 lakh in the new tax regime is a welcome step for the middle-class citizens. This step is likely to help the sector as more disposable income with salaried customers may give supplementary push to demand for personal vehicles.

Another significant announcement made by the government is the elimination of customs duty on capital goods imported for the manufacturing of lithium-ion batteries. This step is a boost for companies that are manufacturing batteries for electric vehicles locally. Overall, this move by the Government of India is expected to have a positive impact on the lithium-ion battery industry, making it more accessible and cost effective for businesses.

Nemin Vora, CEO, Odysse Electric Vehicles