AQ: India renewable energy
Refer to the REI seminar, wherein Government of India representative stated that the VGF payment is spread over 5 year period.
1) Any profit Making Company, must have had the benefits from the Government (subsidies etc) / Eco system.
The profit must be taxed for the improvement of the Economy of the Country.
2) Present renewable energy policy is allowing these profit making companies to avoid paying taxes, and own the assets due to such FREE EQUITY, which belongs to the Government, thus Accelerated Depreciation (AD) is a killer of Economy.
Thus, we are unable to develop the NICHE technology as unrelated industries are owning the project due to avoidance of paying taxes and just to own the assets due to such loop hole in the policy, later making an early exit to make quick money without serving the Nation.
AD promotion is not a level playing field apart from Tax loss to the Government.
3) The Tax thus saved, is again allowed to earn 19 to 24% Return On Equity (ROE), which is very unfair (actually this should have been disallowed to have rs.3/kwh less tariff), due to a fact that, this is public money, hence, should not be allowed to have such wind fall gains.
4) By loading ROE, showing high CAPEX and taking back more than 30% project equity, getting EXIM Bank or such low cost funding to reduce the interest burden, but, Tariff claimed of rs.18 or 15 or 10/kwh is once again a kind of Tariff subsidy, thus, a common man is paying more money for RE power tariff, which is a great killer of economy and making people poor.
5) Viability Gap funding in addition to AD will be an Economic suicide as a project promoter will be allowed to take back 60 to 70% of project cost without paying tax on profit earned !!
This is likely encourage poor equipment buying / its maintenance due to such immediate undue / windfall gains.
6) Despite taking such huge wind fall gains, again these project promoters will be allowed to sell the project to others, to make further wind fall gain to make few existing companies to get undue benefits due to such wrong policy guidelines, despite many representations made to the Government, which states that they have go clearance from Finance Ministry to further ruin the Economy !!
