Ahead of the Interim Union Budget 2024, the country’s power sector received a significant boost with around 58% spike in allocation to Rs 20,671 crore.

Although the upcoming budget is an interim one, it is expected to lay the groundwork for future policy decisions, and analysts anticipate that the power sector will continue to pay attention.

Advertisement

Most brokerages anticipate a focus on fiscal consolidation and priorities regarding capital and non-capital expenditure.

In its recent report, Elara Capital said we anticipate the policy direction and priorities to align closely with recent budgets, as the government navigates between fostering growth recovery and managing challenging debt dynamics.

Axis Securities has also said the power sector is expected to gain additional momentum in the interim budget. It cites the government’s heightened focus on expanding the utilisation of renewable energy as a top priority.

It highlighted that the inclusion of further details about the recently launched Pradhanmantri Suryodaya Yojana, a scheme to make electricity affordable and make India self-reliant in power.

Anticipated announcements in the interim budget include higher capital expenditure for renewable energy, incentives for green initiatives, and production-linked incentives (PLIs) for solar module manufacturing.

Axis Securities suggests expectations for dynamic feed-in tariffs, grid modernisation to better integrate intermittent renewable energy sources, and capital spending on battery storage infrastructure.

Nuvama Institutional Equities estimates that the government may also focus on indigenous energy storage technology development and renewable power supply, which should address energy security and material sustainability.

“There should be sufficient allocation in decentralised renewable energy and energy access to make it mainstream to the country’s green growth,” it said.

Notably, the Ministry of Power earlier this month has said the government has added 1,94,394 MW of generation capacity in the past nine years.

The present installed capacity of power generation is about 4,26,132 MW. Of the generation capacity of 9,943 MW added in the FY24, about 1,674 MW was based on fossil fuel sources and 8,269 MW on renewable energy, the ministry said.