Over the last few years, at MYSUN, we have shared our views and takeaways from the Union Budget and its impact on the solar industry at large. In case you missed it, here is the blog post outlining the impact of the Union Budget of 2021 on the industry. As is the tradition on the 1st of February, the Finance Minister took the floor and announced the Budget for the Financial Year 2022/23.

The budget at large spoke of the energy transition and the need for attention towards climate change and a greener economy. The Finance Minister announced an allotment of INR 19,500 crore for production-linked incentive for manufacturing of solar modules domestically. The Finance Minister announced, "For facilitating domestic manufacturing for the ambitious goal of 280 GW (GigaWatt) of installed solar capacity by 2030, an additional allocation of Rs 19,500 crore for PLI scheme for manufacturing of high efficiency (solar) modules with a priority of fully integrate manufacturing units for polysilicon to solar PV modules will be made."

On the other hand, the budget estimated to the MNRE for 2022-23 for investment in SECI has been halved to less than INR 1,000 Cr from INR 1,800 Cr from the previous financial year. The Government will also be providing financial support for setting up of Distributed Renewable Energy projects across the border villages, aiding their electrification. The budget also saw the introduction of sovereign green bonds for funding public sector infrastructure projects.

In addition to the direct impact, there is also a substantial increase in spends on building roads, in tune of about 56%, which will definitely aid connectivity and infrastructure, allowing for faster movement of cargo across the country.

Like most budgets, it will be interesting to see the detailed implementation plan and policies that will be key towards the success of the budget. On paper, we look to be well geared towards a green economy overall.