In one of the briefest Budget speeches in recent times, the FM made it clear that India’s clean energy transition, domestic manufacturing, and infrastructure investments are at the centre of the government’s plan to revive economic growth and job creation.

The clear focus on climate action and energy transition reaffirmed the government’s growth-centric and environment-conscious vision for the power sector. As India is undergoing an ambitious transition to achieve the RE target of 500 GW by 2030 set by the PM, the Budget for FY23 announced several promising, supportive measures. These included introduction of a framework to allow consumers to choose from more than one power distribution company, and end monopolies in the sector. This announcement was reassuringly in line with the Centre’s intentions to amend the Electricity Act, to delicense the power distribution sector and prepare for a significantly more electrified energy mix. In the same vein, the decision to include data centres and energy-storage systems, including dense charging infra and grid scale systems in the harmonised list of infrastructure sectors, will give a boost to clean energy usage and storage. A battery-swapping policy and interoperability standards for electric vehicles (EVs) will mitigate concerns over expanding EV infrastructure and improve range, viability and encourage the private sector. Introduction of sovereign green bonds will boost availability of green finance and allow global liquidity for sustainable businesses to be channelled to benefit India’s energy transition. The proposed moves to have four pilot projects for coal gasification, getting thermal power plants to use 5-7% of biomass to address the stubble burning issue and the levy of a `2/litre duty on unblended fuel to promote blended fuel will all help achieve the national goal of a green energy transition, while ensuring energy security.

Higher tech manufacturing in support of national goals has gotten a boost in the Budget. The momentum already starting to be visible, in the form of new manufacturing capacities being established for industrial products and components, will be accelerated by the Rs 19,500 crore allocated in the Budget for PLI for manufacturing high-efficiency solar modules. Tariff protection in the form of duties for solar cells and modules will strongly encourage new supply chains to be set up in these futuristic sectors, where India can become a major export hub over time, as it works towards achieving 280 GW of installed solar capacity by 2030. The multiplier effect of local manufacturing will be significant in terms of job creation, shorter supply chains and building local technology ecosystems. PLI schemes in 14 sectors is an ambitious and much-needed push towards creating 60 lakh jobs in the next five years.

The Budget has announced a significant boost in infrastructure capex, using this opportunity to plug a long-standing gap in India’s economic landscape. The expansion of highways, railways, ports, airports and seamless logistical connectivity aimed at connecting smaller towns around metro cities can be a game changer in many ways. Besides large-scale employment, lowering India’s cost of logistics will improve competitiveness of our exports, and the cost of local goods and services. Spending nearly Rs 40 lakh crore in the coming fiscal year to build public infrastructure will transform many urban and rural economies.

Pursuing a prudent approach while avoiding aggressive fiscal consolidation, the FM has judiciously introduced fiscal measures that factor in the early stage of economic recovery. Packing in a host of measures aimed at boosting growth, amid high and rising inflation and continuing Covid uncertainties, the development-oriented Budget outlined a broad 25-year vision for the future, wherein it was good to see the sharp focus on sustainable use of energy.