Friday, March 5, 2010

India Announces Coal Tax To Fund Renewable Energy Projects. ScientificAmerican

March 4, 2010
In a landmark announcement the Indian Finance Minister, in his annual Budget speech, put forward the proposal of setting of National Clean Energy Fund which would be constituted through tax lieved on coal usage in the country.
By: Mridul Chadha

In a landmark announcement the Indian Finance Minister, in his annual Budget speech, put forward the proposal of setting of National Clean Energy Fund which would be constituted through tax lieved on coal usage in the country. The quantum of tax would be INR 50 per ton of coal used, which would generate an annual revenue of around $600 million.

The announcement is extremely important and a major step in India’s endeavor to promote renewable energy infrastructure. India is heavily dependent on coal for power generation with 75% of the power generated coming from coal-fired power plants.

The National Clean Energy Fund would provide finance for the National Solar Mission through which India plans to install 20,000 MW of solar energy by 2022. If implemented the project would potentially make India the largest producer of solar energy worldwide. The finances for such an enormous project has aways been a major hurdle. Ever since its announcement the government has been looking at various options to finance the project.

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