Union Budget 2023: Green growth, Electric Vehicles & clean tech

The Tech Panda asked clean tech sector players what they think of the Union Budget 2023 policies for going green.

With India’s promise to become an all Electric Vehicle nation as a part of its effort to achieve the net zero emissions by 2070 as promised at the 26th Conference of the Parties (COP26) held at Glasgow, all eyes were on Finance Minister Nirmala Sitharaman’s Union Budget 2023.

Read more: Union Budget 2023 wish list: ELECTRIC VEHICLES

With green growth as one of the seven pillars, the FM allocated INR 5172 crore to FAME schemes. The green credit system will incentivise startups and MNC’s working for a sustainable planet. Reduction in custom duty on lithium-ion cells will aid in incentivizing the product cost to end consumers, hence, leading to higher EV sales.

HIGHLIGHTS

• Allocated INR 5172 crore FAME (Faster Adoption and Manufacturing of EVs) schemes
• PM PRANAM launch to promote alternative fertilizer usage
• 500 new Waste to Wealth plants to promote circular economy
• 10,000 bio inputs resource centres to help farmers adopt natural farming
• Promotion of battery energy storage systems
• Funds for replacing old polluting vehicles
• Changes to custom duty on import of capital goods for Li-ion battery manufacturing

Visakh Sasikumar, CEO & Co-founder, Fyn mobility

“This is undoubtedly a future looking announcement which will help India to become one of the prominent players in green hydrogen space and thus reducing the dependency on lithium. With the budget allocated to energy transition we will see a lot of businesses turning to EV fleets. Green credit system will ensure that the startups and MNC’s who is working for making the planet a sustainable place to live are incentivized.

Customs exemption on capital goods and machineries for lithium batteries will reduce the per kilowatt-hour cost of batteries and thus accelerate EV adoption in both personal and commercial segments

“The viability gap funding will ensure that new battery tech will get supported in the early days before it attains economies of scale. Customs exemption on capital goods and machineries for lithium batteries will reduce the per kilowatt-hour cost of batteries and thus accelerate EV adoption in both personal and commercial segments.”

Pritesh Mahajan, Co-founder & CEO, Revamp Moto

Reduction in custom duty on lithium-ion cells will help in incentivizing the product cost to end consumers

“In the recently announced budget, GOI has taken key initiatives in boosting the green economy. Specifically in the EV sector, reduction in custom duty on lithium-ion cells will help in incentivizing the product cost to end consumers. Thus, resulting in boosting the sales of EV’s. This will be further catalyzed by the government’s initiative of strict scrapping policy. We look at increased CAGR of EV sector in the FY 22-23”.

Anmol Bohre, Co-founder & Managing Director, Enigma

“It is really great to see how environmental sustainability has been one of the top 7 priorities in this budget. The pro-EV budget focuses on much-needed initiatives such as customs duty reduction from 21% to 13% on capital goods and machinery required for lithium batteries and an extension of the subsidies on EV batteries for one more year.

The pro-EV budget focuses on much-needed initiatives such as customs duty reduction from 21% to 13% on capital goods and machinery required for lithium batteries and an extension of the subsidies on EV batteries for one more year

“This will certainly encourage each EV manufacturer to contribute to government initiatives to achieve mass EV adoption by 2030. This will also encourage investments in the EV sector which help new players to continue with innovation.”

Anjali Bansal, Avaana Capital

“The Union Budget rightly builds incentives to support low carbon development pathways with the focus on Green Growth among the Saptarishi priorities. Catalyzing sustainable growth in India will require incentives to drive investments in technology and innovation, to ensure that we do not have to make trade-offs between people and planet.

We welcome the increased outlay towards energy transition, and particularly for Green Hydrogen and waste-to-energy, which will boost energy independence

“We welcome the increased outlay towards energy transition, and particularly for Green Hydrogen and waste-to-energy, which will boost energy independence. The PRANAM scheme and bio-inputs centres shall incentivize adoption of sustainable and regenerative agriculture practices. The Green Credit programme will channel much needed capital to support the transition to a sustainable economy. Concessional duties on Li-ion batteries will provide further boost to the EV sector and help decarbonize the transport and logistics sectors. The measures announced in Budget 2023 will further strengthen India’s position as a global climate leader, and catalyze sustainable, inclusive development.”

Anup Jain, Partner, Orios Venture Partners

“This year’s budget announcements such as “This Budget provides ` 35,000 crore for priority capital investments towards energy transition and net zero objectives, and energy security by the Ministry of Petroleum & Natural Gas” have set the wheels in motion for a “Green revolution” in the startup ecosystem.

Startups founders who have been waiting to begin their ventures aimed at energy transition, net zero objectives and security will definitely attract a lot of investments this financial year

“Startups founders who have been waiting to begin their ventures aimed at energy transition, net zero objectives and security will definitely attract a lot of investments this financial year. Orios, recognizing this upcoming imperative globally and for India, began investing in 2020 with Battery Smart (battery swapping) and now more recently with Varaha in the agri based carbon credits space.”

Manish Chaurasia, Managing Director, Tata Cleantech Capital

“Government is walking the talk when it comes to Net Zero commitment. Budget has taken bold steps in adopting new initiatives such as dedicated funds for energy transition and Green Hydrogen mission.

Both the viability gap funding for battery energy storage systems and framework formulation for pumped storage projects will pave way for accelerated adoption of renewable energy

“In addition, the government has been proactive in identifying the need of storage systems to integrate the ambitious renewable energy capacity plans. Both the viability gap funding for battery energy storage systems and framework formulation for pumped storage projects will pave way for accelerated adoption of renewable energy.”

Swapna Gupta, Partner, Avaana Capital

“The measures announced in Budget 2023 will further the ongoing shift towards greener, cleaner mobility in India. Custom duty removal for manufacturing Li-ion batteries will boost Make-in-India for batteries, and further drive cost parity for EVs. Hydrogen is an important alternative fuel, and increased outlay towards green hydrogen will help decarbonize the transportation sector.

Continued support for Vehicle Scrappage policy will help to replace older, polluting vehicles, with greener miles, while maintaining the tenet of circularity

“Continued support for Vehicle Scrappage policy will help to replace older, polluting vehicles, with greener miles, while maintaining the tenet of circularity. The progressive and inclusive budget will help catalyze more investment into clean mobility and other climate technologies.”

Utkarsh Singh, Co-Founder & CEO, BatX

“Union Budget 2023 looks promising for green growth and developing a sustainable ecosystem in India, keeping circularity in focus. The allocation of INR 35,000 crore to achieve the target of Net Zero by 2030 and energy transition seems to be a positive and a good move by the government in imposing a green credit programme under Environment Protection Act that will benefit companies.

The allocation of INR 35,000 crore to achieve the target of Net Zero by 2030 and energy transition seems to be a positive and a good move by the government in imposing a green credit programme under Environment Protection Act that will benefit companies

“Since electric mobility is growing in India at a rapid pace YOY and considerably contribute to sustainability, the national green hydrogen program will develop huge potential in lowering carbon intensity and reducing dependency on fossil fuel imports supported by lithium ion batteries for all kind of NEV’s. With the increase of funding in green hydrogen, battery energy storage systems with a capacity of 4000 MWh will be supported with viability-gap funding and renewables. The relief from custom duties on lithium-ion cells for batteries for another year will further help in strengthening the industry. Still India would need to focus on recycling of batteries and produce materials in India, to create a sustainable Electric mobility ecosystem in India. The government has also continued its efforts to support start-ups by offering tax benefits by extending the advantage through March 31, 2024.”

Kapil Shelke, Founder & CEO, TORK Motors

“The changes in the Income tax slab structure has enhanced the purchasing power of the populace. This move will encourage the adoption of cleaner, cost effective means of travel for their daily commute and the availability of FAME-II subsidy will further boost the sales of electric vehicles in the coming fiscal.

The extension on customs duty on the import of capital goods and machinery for developing lithium-ion cells would also enable EV manufacturers to localise their products in the long term, leading towards reduction in the cost of an electric vehicle for the consumer in the years to come

“Additionally, the extension on customs duty on the import of capital goods and machinery for developing lithium-ion cells would also enable EV manufacturers to localise their products in the long term, leading towards reduction in the cost of an electric vehicle for the consumer in the years to come, particularly for a brand like ours that are 95% indigenously manufactured in India.”

Akshit Bansal, Founder & CEO, Statiq

“The union budget for 2023-24 will pave the way for the green empowerment of the country and reflects the progressive attitude of the government toward sustainable development. We welcome the vision of the government of India in establishing and boosting the focus on green growth. As India’s new budget envisions 7 priorities, green growth is among the top priorities of it.

The government’s green growth efforts will help in reducing carbon impact, promote green alternatives and create space for employment

“In its budget, the government has announced a large sum of Rs 35,000 crore to be allocated towards achieving the net zero goal and energy transition. The government has set its target to reach green hydrogen production of 5 MMT by 2030. This will encourage the private sector involved in green renewable energy-based products to expand their business and invest more in the business of green energy.

“The government’s green growth efforts will help in reducing carbon impact, promote green alternatives and create space for employment. It will enable the use of green-based products at a larger scale among the common public. The government’s green signal to green growth will give an edge to companies like electric vehicle manufacturers to market their products and enhance the opportunities for industry players to cater to their target audiences. This will also help in meeting the carbon offset program of various companies in the green sector.”

Sudhindra Holla, Director, India & SAARC, Axis Communications

“The Union Budget for this year focuses on inclusive economic growth in order to strengthen India’s status as a global digital powerhouse. We are optimistic about the government’s saptarishi, or seven pillars, with a renewed emphasis on green growth. We are delighted with the Centre’s focus on tourism and investment in transportation infrastructure projects as this indicates an increase in demand for safety and surveillance solutions.

We are aligned to further action India’s vision to transform our cities into ‘sustainable cities of tomorrow’. This will serve as a stepping stone in revitalising Smart Cities planning and urban development

“We are aligned to further action India’s vision to transform our cities into ‘sustainable cities of tomorrow’. This will serve as a stepping stone in revitalising Smart Cities planning and urban development. The budget 2023 has a future-ready outlook and compliments the nation’s unmatched growth for digital economy, innovation, and inclusive development.”

Tushar Garg, Co-founder & Chief Business Officer, BluSmart

“The budget announcements do not affect our business directly in any manner. We welcome the move by the government to exempt the customs duty on cell manufacturing as it likely to bring down prices of electric cars in the long run.”