Union Budget for the Energy Sector 2026

1. Ministry of Petroleum and Natural Gas: Rs.30,443 crore

1. PM Surya Ghar: Rs.22,000 crore for the Muft Bijli Yojana to increase rooftop solar panel installation across the country

1. Electronics Component Manufacturing Scheme: Rs 40,000 crore.

1. Carbon utilisation and storage: Rs 20,000 crore over five years.

1. Reformed Linked Distribution Scheme: Rs.18,000 crore for smart meter installation and electrical equipment upgrades across consumer categories.

1. Ministry of New and Renewable Energy: Rs.32,914 crore.

1. Dedicated Rare Earth Corridors to be established in Kerala, Andhra Pradesh, Tamil Nadu, and Odisha.

1. Semiconductor Mission 2.0 will be launched.

1. Battery Energy Storage Systems and Pumped Storage Hydropower integration on a large scale to enable smooth transition to renewable energy.

Union Budget 2025-26 for Energy Sector

The highlights for Union Budget 2025-26 for Energy Sector are as listed below:

1. The government plans to increase funding for renewable energy projects, aiming to accelerate the deployment of clean energy sources.

1. The budget includes tax reforms to promote investment in green energy projects, enhancing the financial viability of renewable energy ventures.

1. Measures are introduced to provide financial support to Distribution Companies (DISCOMs), improving the financial health of the power distribution sector.

1. The government plans to amend the Atomic Energy Act and the Civil Liability for Nuclear Damage Act to facilitate private sector participation in nuclear energy projects. This initiative aims to develop 100 GW of nuclear energy by 2047.

1. To reduce dependence on imports, the budget includes measures to support domestic manufacturing of renewable energy components, such as solar panels and wind turbines.

1. Understanding the need for a skilled workforce, the budget allocates resources for skill development programs in the renewable energy sector.

Union Budget 2024-25 for Energy Sector

The highlights for Union Budget 2024-25 for Energy Sector are as listed below:

1. The government plans to increase the investment of eight state-owned power companies by nearly 14% to Rs 67,286.01 crore for the 2024-25 fiscal year, up from Rs 59,119.55 crore in 2023-24.
2. The companies include Power Grid Corporation, SJVN Ltd, NHPC Ltd, NTPC Ltd, Damodar Valley Corporation, Northeastern Electric Power Corporation, and Tehri Hydro Development Corp.
3. Viability gap funding for harnessing offshore wind energy to support India's 'net-zero' commitment by 2070. India’s current renewable energy capacities are 73 GW in solar, 45 GW in wind, 47 GW in large hydro, 10 GW in biomass, 5 GW in small hydro, and 583 MW in waste-to-energy.
4. The Pradhan Mantri Suryodaya Yojana will provide up to 300 units of free electricity monthly to one crore families, saving them up to Rs 18,000 annually.
   1. The initiative aims to solarize rooftops, offering free electricity and the opportunity to sell surplus power.
5. The government will mandate blending compressed biogas (CBG) with compressed natural gas (CNG) for transportation and piped natural gas (PNG) for domestic use, providing financial assistance for converting biomass to CBG.
   1. Coal gasification and liquefaction projects, along with coal-to-SNG and coal-to-ammonium nitrate projects, will also be promoted with significant investments.
6. To support electric vehicles, the government will expand the EV ecosystem, encouraging the use of electric buses for public transport and strengthening charging and manufacturing infrastructure.

Highlights of Interim Union Budget 2024 on Energy Sector

1. A commitment to achieve 'Net Zero' emissions by 2070 has been made as part of sustainable development efforts. Additionally, measures such as providing viability gap funding for wind energy projects, establishing coal gasification and liquefaction capacity, and implementing phased mandatory blending of CNG, PNG, and compressed biogas are being undertaken.
2. Financial assistance will be provided for the procurement of biomass aggregation machinery, and initiatives like rooftop solarization aim to enable one crore households to receive up to 300 units of free electricity per month.
3. Furthermore, the adoption of e-buses for public transport and the support for manufacturing and charging infrastructure for electric vehicles will contribute to strengthening the e-vehicle ecosystem.
4. Under the Prime Minister Ujjwala Yojana (PMUY), over 10 crore LPG connections have been released.
5. Additionally, distribution efforts include the provision of 36.9 crore LED bulbs, 72.2 lakh LED tube lights, and 23.6 lakh energy-efficient fans through the UJALA scheme.
6. Furthermore, approximately 1.3 crore LED streetlights have been installed under the Street Lighting National Program (SNLP).

Union Budget FY 2023-24 Highlights on Energy Sector

The Union Budget 2023-24 highlights with respect to the energy sector are listed below:

1. Finance Minister Nirmala Sitharaman proposed a push in the green energy sector during the Union Budget 2023-24. The country is striving at accelerating decarbonisation and growing sustainable energy.

1.  Finance Minister further added that the country will prioritise reducing carbon intensity and developing green jobs. The stocks of green and renewable energy firms rose as a result of this announcement.
2. Inox Green Energy increased by 6.9%, while Inox Wind increased by 5.8%. Gujarat Gas, a CNG heavyweight, climbed by 5.7%, while Borosil Renewables recorded an 8.79% rise.
3. A total of Rs.19,700 crore has been earmarked for the National Green Hydrogen Mission to help the economy shift from fossil fuels to green power.
4. The government intends to reduce the country's estimated total carbon emissions by 1 billion tonnes by the decade's end. 
5. By 2030, the country is expected to have a decrease in the carbon intensity of less than 45%. The government also aims at achieving net-zero carbon emissions by 2070.

Union Budget FY 2021-22  Energy Sector

According to the Union Budget 2021 that was announced by the Finance Minister Nirmala Sitharaman on 1 February 2021, Rs.3.05 lakh crore will be allocated for the purposes of power distribution over the next five years. The release of funds will depend on the financial position of DISCOMS. Several experts hope that the allocation will help DISCOMS as they have been affected by the coronavirus pandemic. During last year's budget announcement, the Finance Minister has also advised for the closure of carbon-inefficient power plants.

Union Budget FY 2019-20 Energy Sector

Finance Minister Nirmala Sitharaman delivered her first budget speech on 5 July 2019. The energy sector is expected to witness a number of reforms as per the Union Budget 2019. These reforms include the overall improvement of the power sector through schemes which will help revive the state distribution companies. This also includes the betterment of the power plants which are dependent on natural gas and are currently facing the lack of fuel. In addition to these, a reform in terms of the structure and the tariff can also be expected. 

These improvements will help the power sector to a large extent as they have been facing stress in terms of finances for quite some time. The main reason for this stress has been the poor condition of the state power distribution companies, the shortage of fuel, and the delay in clearances. 

The reforms which are expected for the energy sector as per the Union Budget 2019 can be summed up as follows: 

1. The total power generation from various sources (which include hydel power, thermal power, and nuclear power) is expected to see a growth of 6.5% for this fiscal year. This rise is almost twice of last year's growth which stood at 3.5%. 
2. The total power generation of power is expected to cap at around 1,330 billion units for this fiscal year. Almost 85% of the generated power will be sourced through thermal power plants. 
3. The power generated through coal-powered thermal plants will be around 79%. The remaining portion will be covered by natural gas, lignite, and liquid fuel thermal power plants. 
4. Hydel power plants will be responsible for around 10% of the power generation, whereas the nuclear power plants will be responsible for about 3.3% of the power generation. 
5. The Finance Minister has also proposed the unveiling of a new package for the power sector which will make the "One Nation, One Grid" plan a successful one. The "One Nation, One Grid" plan has been introduced for the easy and affordable distribution of power to states. It will also help to take the connectivity infrastructure to the next level. 
6. She further said that all the rural households will have electricity connections and cooking gas connections by 2022. However, she has also mentioned that the assurance in terms of reaching the target is only for the households who are willing to take the connections. 
7. A new scheme has been announced which invites companies from across the globe to set up mega manufacturing plants for different technological areas. These include the likes of solar photovoltaic cells, semi-conductor fabrication, solar electric charging infrastructure, and lithium storage batteries. This will be done through a transparent bidding process wherein all the companies will be taking part. The companies will be eligible for exemptions linked to investments under Section 35 AD of the Income Tax Act. In addition to that, they will also be eligible for certain indirect tax benefits. 
8. The revival scheme for the gas-based power plants and a relevant tariff policy are being drafted and are in the final stage. Once the draft is ready, it will be sent for approval to the Cabinet. 
9. Private businesses who encourage farmers to install solar plates in their fields for the production of solar energy will be supported by the government. As much as Rs.1 lakh can be earned annually from each acre of land. 

The Bottom Line

The Interim Union Budget 2024 suggested that the Government of India is planning to provide significant focus to the energy sector in India and ensure that basic amenities like LPG, CNG, fuel, electricity become sustainable and easily available for the people of India. The Government has also allocated Rs.8,500 crores to the Solar Power Grid program.