Budget 2016 - Renewable Energy Ministry starved for Funds?

India’s Prime Minister Narendra Modi might have promised 175 Gigawatts of renewable energy by 2022, but there is little hope for those expecting India to meet its ambitious target.

Budget 2015 allocated Rs. 4,500 Crores to the MNRE (Ministry of New and Renewable Energy). This time the Ministry wants more. This time they’ve sought over Rs 10,000 Crores, a senior official in the ministry told reporters. Obviously, last year’s budgetary allocation was insufficient.

"Different schemes which have taken off are Viability Gap Funding of the MNRE and green energy corridor," the official said.

The government has 175 Gigawatts as target for renewable energy generation by 2022. Of this 100 GW is planned to be Solar power, 60 GW Wind power, 10 GW from Bio-mass and 5 GW from Hydro-electric power.

All of this would require investment of around $150 billion in investment over the next seven years. However, the Central government's budget allocation for solar energy for the current financial year is merely 0.45% of the required investment.

This December, a Parliamentary panel mentioned that the insufficient capital allocation can hamper India’s 175 GW renewable energy capacity ambitions. However, there was no real mention of exact capital requirements. It only said that sufficient funds must be allocated to ensure that the lack of funds don’t come in the way of India’s ambitious renewable energy plans.

The panel also expressed concerns about the insufficient capital allocation.

The Modi government will present Budget 2016 on February 29, 2016. Let’s wait and watch if they take heed to these capital demands.