Coal cess 'buffer' for cuts - Sharp drop in funds for clean energy and forests

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By Our Special Correspondent
  • Published 4.03.15

New Delhi, March 3: Sharp cuts in fundings for the ministries of environment and forests and renewable energy proposed by the Union budget for 2015-16 have surprised sections of environment experts, but senior officials say both ministries stand to gain from the increased cess on coal.

The budget outlay for the new and renewable energy ministry is Rs 303 crore, a 68 per cent drop from last year's initial allocation of Rs 956 crore, and the environment and forests ministry is to get Rs 1,618 crore, a 25 per cent reduction over last year's Rs 2,256 crore.

But neither ministry was able to use its initial allocations of last year. The revised 2014-15 outlay for renewable energy was Rs 554 crore, while the environment and forests ministry's revised figure was Rs 1,764 crore.

Senior officials are seeking to play down the cuts, saying the increase in the cess on coal from Rs 100 per tonne to Rs 200 per tonne would help build the National Clean Energy Fund that could be used to channel resources into programmes administered by both ministries.

"We expect the increase in the cess on coal to generate about Rs 12,000 crore - and some of this money is expected to be routed into renewable energy programmes," a senior official in the renewable energy ministry told The Telegraph.

The Narendra Modi government has announced scaled-up renewable energy targets that aim to generate 175,000MW of electricity from renewable energy by 2022, of which 100,000MW is expected to be from solar power.

"This is an ambitious target - demanding the addition of 25,000MW every year, adding almost the equivalent of the installed renewable energy capacity we have now every year," said Chandra Bhushan, deputy director-general with the Centre for Science and Environment, a non-government organisation based in New Delhi.

"While much of these targets are expected to come from private investments, reduction in budgetary support is hard to understand in such a time."

The renewable energy ministry's allocation for research and development, for instance, has been cut from Rs 1,498 crore last year to Rs 90 crore for 2015-16.

"But we need intensive research and development efforts to testing and local adaptation of renewable energy technologies," Bhushan said.

The budget documents, however, clarify that the Centre-state funding pattern is being modified under plans to achieve "greater devolution of tax resources" to the states. Sources said the states themselves are expected to fund initiatives across several sectors, including the environment ministry.

But allocations within the environment ministry suggest that several institutions and initiatives will receive lower funding during 2015-16 than they did during 2014-15.

The Indian Council of Forestry Research and Education will receive Rs 125 crore, in contrast to Rs 156 crore last year. The Central Zoo Authority will receive about Rs 6 crore, a 77 per cent reduction over the allocation of Rs 27 crore during 2014-15.

The cumulative outlay for wildlife preservation programmes has gone down from Rs 83 crore in 2014-15 to a proposed allocation of Rs 47 crore for 2015-16. The outlay for the Central Pollution Control Board has also dropped from Rs 81 crore in 2014-15 to Rs 72 crore for 2015-16 - a figure slightly higher than the board's 2014-15 revised figure of Rs 70 crore.