The 11th year Plan (2007-2012) of the Government of India has indicated the importance of energy in the following words: ‘Availability and access to energy are considered as catalysts for economic growth. The envisaged growth of the economy at 9% in the Eleventh Plan cannot be achieved without a commensurate increase in the availability of energy.
RENEWABLE ENERGY IN INDIA: SCOPE FOR FOREIGN INVESTMENT
Arkodeb Sinha, Advocate (F 993/04) | Fox & Mandal, Advocates
In India there is not yet a specific legislation on renewable energy. Renewable energy in India is statutorily recognized primarily through the Electricity Act, 2003 and other legislations like the Energy Conservancy Act, 2001 (both being Central Acts) and also through policies (which have the force of law) of the Government of India like the National Electricity Policy 2005 and Integrated Policy Report 2006 . The said Electricity Act empowers regional or State (Federal) electricity regulators to frame regulations governing the distribution and utilization of renewable sources of energy. As such, several Federal State Regulators have framed their own set of regulations in consonance with the Central Acts and Policies. The Article here would discuss the scope of foreign investment in renewable sector in India through the incentives available to investors for investment in renewable energy sector and the policy of Government of India on foreign investment in the renewable energy sector.
- Section 80IA of the Income Tax Act, 1961 provides for a deduction of an amount equal to 100% of the profits and gains for ten consecutive assessment years from the gross total income of an assessee derived by an undertaking or an enterprise from the following eligible business:
- business of generation or generation and distribution of power during the period beginning on the 1st day of April, 1993 and ending on the 31st day of March, 2011;
- transmission or distribution by laying a network of new transmission or distribution lines during the period beginning on the 1st day of April, 1999 and ending on the 31st day of March, 2011;
- undertakes substantial renovation and modernisation of the existing network of transmission or distribution lines during the period beginning on the 1st day of April, 2004 and ending on the 31st day of March, 2011.
- For establishing industry in the filed of Non-conventional and renewable sources of energy sector, no industrial clearance is required;
- The Central Electricity Authority has generally allowed setting up projects amounting to Rs.1 billion;
- Benefit of 80% accelerated depreciation under the Income Tax Act for renewable energy devices like Solar cookers, Solar water heaters and systems, Air/gas/fluid heating systems, Solar power generating systems, Solar pumps based on solar-thermal and solar-photovoltaic conversion, Solar-photovoltaic modules and panels for water pumping and other applications, Wind mills and any specially designed devices which run on wind mills, any special devices including electric generators and pumps running on wind energy, Biogas-plant and biogas-engines, etc and machinery and plant used in the manufacture of any of the such items;
- IREDA financing for manufacture of Renewable Energy equipments;
- Customs duty concession on Renewable Energy spares and equipment;
- Excise duty concession in form of reduced duty or exemption on specified capital goods in the Renewable Energy sector;
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