Laudable increase in allocation for solar energy to help achieve clean goals
Major part of the allocation, i.e., Rs 24,224.36 crore, is for solar energy. This includes Rs 1,500 crore for solar power (grid), Rs 2,600 crore towards Kisan Urja Suraksha Evam Utthaan Mahabhiyan (Kusum) and Rs 20,000 crore towards PM Surya Ghar Muft Bijli Yojana.
With India’s commitment to renewable energy transition, the Union Budget 2025-26 allocated Rs 26,549.38 crore to the Ministry of New and Renewable Energy, up 53.48 per cent against Revised Estimates of Rs 17,298.44 crore a year ago. The allocation has increased by 904 per cent since FY21.
Major part of the allocation, i.e., Rs 24,224.36 crore, is for solar energy. This includes Rs 1,500 crore for solar power (grid), Rs 2,600 crore towards Kisan Urja Suraksha Evam Utthaan Mahabhiyan (Kusum) and Rs 20,000 crore towards PM Surya Ghar Muft Bijli Yojana.
This scheme aims at solarising one crore households by providing free electricity up to 300 units every month. The aim of PM-Kusum is to increase the income of farmers and provide sources for irrigation and de-dieselise the agricultural sector. Under the scheme, subsidy is given for the installation of standalone solar pumps and for solarisation of existing grid-connected agricultural pumps.
The Government has also allocated Rs 600 crore towards the Hydrogen Mission, double of Rs 300 crore (RE) in FY25. Approved on January 4, 2023, the green hydrogen mission aims to make India a leading producer and exporter of green hydrogen with an annual production of 5 million metric tonne by 2030.
The Government has also launched a new manufacturing mission under the ambitious Make in India initiative. This strategic move aims at establishing a robust ecosystem for production of solar photovoltaic (PV) cells, electrolysers, and grid-scale batteries — key components in advancing India’s clean energy transition.
The Budget has sought to further indigenise the manufacturing value chain for key segments of India’s energy transition by slashing customs duties on solar cells and modules along with key inputs for manufacturing electric vehicle (EV) batteries.
During her Budget speech, the Finance Minister said that 35 additional capital goods, which are used in lithium-ion battery manufacturing, will now be exempt from basic customs duty. These include cobalt powder and waste, the scrap of lithium-ion battery, lead, zinc and 12 more critical minerals.
This will not only accelerate clean technology adoption but also create a robust supply chain supporting India’s carbon neutrality goals for 2070. Currently, EV penetration in two-wheeler sales in India is about 5-6 per cent while the share of electric cars in total car sales is about 2-3 per cent.
By fostering local innovation and ensuring cost efficiency, this Budget lays the foundation for rapid industry growth and broader adoption of EVs.
