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Modi Plans to End Blackouts by Budget Plans Funds for Grid and Solar

published: 2014-07-14 18:28

In order to tackle India’s blackouts in remote places, Prime Minister Narendra Modi’s government plans to spend 15 billion rupees (approximately US$250 million) on solar power so that electricity supply to farmers can be reformed. This is a new aspect of Modi’s ambitious solar policy.

There are more than 300 million Indian people live in places without enough power access. Although the Indian government had a target to provide 100% electricity to all households in 2012, it failed. Modi therefore embarks on the new budget plan to deal with the power supply issues after being elected.

“Power is a vital input for economic growth,” Finance Minister Arun Jaitley said in his budget speech. “The government is committed to providing 24/7 uninterrupted power supply to all homes.”

Gujarat, Modi’s home state, is where the 5-billion-rupee project to be launched. As long as the project has been completed, most areas in Gujarat can access to uninterrupted electricity. The proposed budget has to be passed by parliament by July 31st, while the huge amount of money seems insufficient to distribute electricity to every corner in the nation. Kameswara Rao, head of energy, utilities and mining in India for PricewaterhouseCoopers LLP., pointed: “The resources required to split off rural electricity supply are far larger than budgeted. This initial allocation should be used to attract domestic and multilateral funds to supplement the program.”

Bloomberg Businessweek reported that the budget set aside 10 billion rupees on projects to boost the use of sun power, with about half of the amount to be spend on building so-called ultra-modern solar power plants in Rajasthan, Tamil Nadu and Jammu and Kashmir states where receive intensive solar radiation. Another 4 billion rupees would be used to install 100,000 PV-powered farm irrigation pumps, and an additional 1 billion rupees to install solar panels on the banks of canals.

In addition, the budget suggests a tax on coal producers to be doubled to 100 rupees a metric ton to fund renewable energy programs. This may add an extra 50 billion rupees to the budget every year, calculated from the tax collected in 2010. Solar manufacturers, wind-turbines makers and builders of biogas plants can also receive duties eliminations so that they can develop clean energy resources with lessened financial stress.

(Photo Credit: Commons Wikimedia)

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