Union Budget 2024 | FM Nirmala Sitharaman cuts customs duty on minerals critical for energy transition

New Delhi: Finance Minister Nirmala Sitharaman on Tuesday announced a cut in customs duty on minerals such as lithium, copper and cobalt, which are critical for nuclear energy, renewable and other sectors, to give a fillip to the energy transition.

In her budget speech in Lok Sabha, Sitharaman recalled that in the interim budget she had announced a strategy to sustain high and more resource-efficient economic growth, along with energy security in terms of availability, accessibility and affordability.

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"We will bring out a policy document on appropriate energy transition pathways that balances the imperatives of employment, growth and environmental sustainability," she said.

Noting that minerals such as lithium, copper, cobalt and rare earth elements are critical for sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics, she proposed to fully exempt customs duties on 25 critical minerals and reduce BCD (basic customs duty) on two of them.

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This will provide a major fillip to the processing and refining of such minerals and help secure their availability for these strategic and important sectors, she said.

She stated that energy transition is critical in the fight against climate change.

To support energy transition, she proposed to expand the list of exempted capital goods for use in the manufacture of solar cells and panels in the country.

Further, she stated that in view of sufficient domestic manufacturing capacity of solar glass and tinned copper interconnect, I propose not to extend the exemption of customs duties provided to them.

Noting that steel and copper are important raw materials and to reduce their cost of production, she proposed to remove the BCD on ferro nickel and blister copper.

"I am also continuing with nil BCD on ferrous scrap and nickel cathode and concessional BCD of 2.5 per cent on copper scrap," she said.

About the PM Surya Ghar Muft Bijli Yojana, which was rolled out earlier this year, he informed the House that in line with the announcement in the interim budget, PM Surya Ghar Muft Bijli Yojana has been launched to install rooftop solar plants to enable 1 crore households obtain free electricity up to 300 units every month.

The scheme has generated remarkable response with more than 1.28 crore registrations and 14 lakh applications, and we will further encourage it, he stated.

She further stated that a policy for promoting pumped storage projects will be brought out for electricity storage and facilitating smooth integration of the growing share of renewable energy with its variable & intermittent nature in the overall energy mix.

She stated that nuclear energy is expected to form a very significant part of the energy mix for Viksit Bharat.

Towards that pursuit, our government will partner with the private sector for setting up Bharat Small Reactors; research & development of Bharat Small Modular Reactor and research & development of newer technologies for nuclear energy, she informed the House.

The R&D funding announced in the interim budget will be made available for this sector, she added.

The development of indigenous technology for Advanced Ultra Super Critical (AUSC) thermal power plants with much higher efficiency has been completed, she informed the House.

A joint venture between NTPC and BHEL will set up a full-scale 800 MW commercial plant using AUSC technology and the government will provide the required fiscal support, she added.

Moving forward, the development of indigenous capacity for the production of high-grade steel and other advanced metallurgy materials for these plants will result in strong spin-off benefits for the economy, she pointed out.

A roadmap for moving the ‘hard to abate’ industries from ‘energy efficiency’ targets to ‘emission targets’ will be formulated, she stated adding that appropriate regulations for the transition of these industries from the current ‘Perform, Achieve and Trade’ mode to ‘Indian Carbon Market’ mode will be put in place.

She further stated that an investment-grade energy audit of traditional micro and small industries in 60 clusters, including brass and ceramic, will be facilitated.

Financial support will be provided for shifting them to cleaner forms of energy and implementation of energy efficiency measures. The scheme will be replicated in another 100 clusters in the next phase, she stated.

Gaurav Kedia, Chairman, Indian Biogas Association said that the Union Budget 2024 has unveiled a roadmap towards a sustainable and resilient India, with agriculture and energy security at its core.

It is anticipated that these initiatives will catalyze the growth of the biogas industry, leading to increased rural employment, reduced carbon emissions, and improved soil health, he stated.

Union Budget 2024 LIVE | Making a record for any Finance Minister, Nirmala Sitharaman presented her 7th consecutive Union Budget on July 23, 2024 under the Modi 3.0 government. This Budget brought tax relief for the middle class, while focusing on jobs through skilling, incentivising employers. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.