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What to Expect for India's Energy Sector in Budget 2024

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India’s energy sector has been growing rapidly for the past few decades. Here’s a look at some of the most important features of the industry:

  1. The Indian energy sector is governed by the Union Government with a combination of five ministries; Power, Coal, Petroleum & Natural Gas, Renewable Energy and Atomic Energy

  2. India’s energy sources range from coal, natural gas, and oil to wind, solar, hydro etc.

  3. India’s policy focus has been on investments in infrastructure and energy as these two aspects contribute greatly towards the growth of the economy

  4. Both natural gas and other renewable sources of energy have increased in popularity and are also the ones that are least affected by COVID-19.

Key Expectations from Budget 2024 for the Energy Sector

Some of the expectations that the energy sector expects from the upcoming budget include:

  1. Push for renewable energy, regulatory reforms, development of infrastructure etc.

  2. Promotion of cleaner energy and sustainable growth

  3. Reduction of the GST on Auto LPG from 18% to 5% 

  4. Incentives for green hydrogen to help the country transition to a low-carbon economy

  5. Helping bridge the gap between sustainability goals and actions

  6. Adoption of policies that help with environmental protection

  7. Strengthening the energy efficiency by focussing on developing India’s building infrastructure 

  8. Promoting provisions that help further the initiatives in green tech

Government's Focus on Sustainable Energy

Keeping its focus intact on sustainable energy, here are some of the developments that the government has initiated:

  1. The government’s Production Linked Incentive or PLI schemes help promote domestic manufacturing of solar cells and modules.

  2. India stands at the 3rd position in the world where installed renewable energy capacity is concerned

  3. The government has also announced a Green Hydrogen Mission for producing 5 MMT of Green Hydrogen by 2030 to decarbonise refineries and the fertiliser sector

  4. Launched in 2019, the PM KUSUM scheme is a clean energy initiative to help solarise agriculture pumps of around 3.5 million farmers.

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To simplify this year's Budget and its impact on your life and investments, we bring you #BudgetSimpleHai!

Visit our website or follow our social handles for live updates on the Union Budget. Read in-depth reports, watch videos, and understand what's in store.

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Impact on Oil and Gas Industry

The budget for 2024 might have certain impacts on the oil and gas industry. These include:

  1. The possibility of domestic oil production getting a huge boost due to the government's initiatives

  2. The industry also hopes to see an increase in the consumption of gas along with the adoption of alternative fuel sources

  3. Possible relief to oil and gas producers from adverse economic issues from high taxes and production costs  due to the rising crude oil prices 

  4. Increasing the share of natural gas in the overall energy mix to achieve the goal of net zero emissions by 2070

Role of Private Sector in Energy Development

The private sector plays a huge role in the energy development of the country. Here are a few reasons why that is:

  1. Private sector participation in the energy sector has led to improvements and functional efficiencies in energy distribution across the  country

  2. The private sector is also better placed to provide high-quality service helping retain more customers

  3. Increased investment in real-time energy consumption, infrastructure, AI, technology etc.

  4. Better energy efficiency due to innovations through the private sector  

  5. Expansion to the availability and accessibility to electricity from various sources including green energy making the energy mix more sustainable.

Challenges and Opportunities for Innovation and Technology in Energy 

Some of the challenges in the energy sector include:

  1. Due to rapid economic growth, the demand for energy has also grown and this needs a shift away from fossil fuels

  2. India needs to triple its wind and solar capacity to greater than 500 Gigawatts to bridge emission gaps

  3. India’s energy transition needs  investments of up to $9.2 trillion annually 

Some of the opportunities in the Indian energy sector include:

  1. Creation of millions of jobs and reduction in greenhouse gas emissions

  2. The country’s long coastline and ample sunlight can help renewable power generation through solar, wind and hydro sources.

Conclusion

With the upcoming budget, the Indian energy sector is going to see quite a few shifts. With expectations like:

  1. Push for renewable energy, regulatory reforms, development of infrastructure etc.

  2. Promotion of cleaner energy and sustainable growth

  3. Reduction of the GST on Auto LPG from 18% to 5% 

  4. Incentives for green hydrogen to help the country transition to a low-carbon economy

The Indian energy sector could very well experience impacts like:

  1. Possible relief to oil and gas producers from adverse economic issues from high taxes and production costs  due to the rising crude oil prices 

  2. Increasing the share of natural gas in the overall energy mix to achieve the goal of net zero emissions by 2070

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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Frequently Asked Questions

What are the key expectations of the Indian energy sector from Budget 2024?

Answer Field

Some of the expectations of the Indian energy sector from the budget 2024 include:

  • Promotion of cleaner energy and sustainable growth

  • Reduction of the GST on Auto LPG from 18% to 5% 

  • Strengthening the energy efficiency by focussing on developing India’s building infrastructure 

How will Budget 2024 impact renewable energy initiatives in India?

Answer Field

Here is a list of the possible impacts that the budget can have on renewable energy initiatives

  • Increase in renewable energy sources 

  • Better regulatory reforms

  • Faster transition to a low-carbon economy with incentives for green hydrogen

  • Better provisions to help promote better initiatives in green tech

What policies and regulatory changes are anticipated in Budget 2024 for the energy sector?

Answer Field

Some of these policies and regulatory changes could include:

  • Reimposition of the approved list of models and manufacturers or ALMM, has increased the demand for domestic solar modules.

  • Changes and policies that focus on clean energy, forming and promoting a carbon market, developing better power infrastructure, promoting energy efficiency in all sectors etc. are anticipated

Will Budget 2024 introduce incentives for green energy projects?

Answer Field

Yes. That is the hope, especially since India needs to achieve its Zero Net Emissions goal by 2070.

What infrastructure developments and investments are expected for the energy sector in Budget 2024?

Answer Field

Some of the infrastructure developments and investments for the energy sector under the Union Budget could include allocations to renewable energy projects, better grid infrastructure and investment in innovative technologies. The budget also looks to add certain reforms that can help decrease regulatory bottlenecks.

How will Budget 2024 support the expansion of solar and wind energy in India?

Answer Field

It is expected that under the Budget 2024, the government will take a  balanced approach in promoting India's efforts in energy transition with help from renewable energy markets like solar, wind, green hydrogen etc

What role will public-private partnerships play in energy projects under Budget 2024?

Answer Field

With the help of public-private partnerships, the energy sector might see certain developments. These include:

  • Improvements and functional efficiencies in energy distribution across the  country

  • Increased investment in real-time energy consumption, infrastructure, AI, technology etc.

  • Better energy efficiency due to innovations through the private sector 

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