India Budget 2023: Nuclear Energy Mission, EV Support

New Delhi, Feb 1 (PTI) Finance Minister Nirmala Sitharaman on Saturday announced a Rs 20,000-crore nuclear mission and duty exemptions for crucial minerals and capital goods for electric vehicles to step up energy transition.

Boosting nuclear energy at this time is important as it can replace coal as the base load for the power sector in India.

Presenting her eighth straight budget in the Lok Sabha on Saturday, the minister announced the Nuclear Energy Mission for Viksit Bharat for development of at least 100 GW of nuclear energy by 2047.

She said that the mission is essential for energy transition efforts. For an active partnership with the private sector towards this goal, amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be taken up, she informed the House.

A Nuclear Energy Mission for research & development of Small Modular Reactors (SMR) with an outlay of Rs 20,000 crore will be set up.

At least five indigenously developed SMRs will be operationalized by 2033.

About the critical minerals, Sitharman said in the July 2024 Budget, she had fully exempted Basic Customs Duty on 25 critical minerals that are not domestically available. She had also reduced BCD of 2 other such minerals to provide a major fillip to their processing especially by MSMEs.

"Now, I propose to fully exempt cobalt powder and waste, the scrap of lithium-ion battery, Lead, Zinc and 12 more critical minerals. This will help secure their availability for manufacturing in India and promote more jobs for our youth," she said.

For promoting electric vehicles (EVS), she said that 35 additional capital goods for EV battery manufacturing, and 28 additional capital goods for mobile phone battery manufacturing have been exempted from duties.

This will boost domestic manufacture of lithium-ion batteries, both for mobile phones and electric vehicles, she opined.

She also announced setting up the National Manufacturing Mission covering small, medium and large industries for furthering “Make in India” by providing policy support, execution roadmaps, governance and monitoring framework for central ministries and states.

"Given our commitment to climate-friendly development, the Mission will also support Clean Tech manufacturing. This will aim to improve domestic value addition and build our ecosystem for solar PV cells, EV batteries, motors and controllers, electrolyzers, wind turbines, very high voltage transmission equipment and grid scale batteries," she said.

About the power sector reforms, she said that the government will incentivize electricity distribution reforms and augmentation of intra-state transmission capacity by states.

"This will improve the financial health and capacity of electricity companies. Additional borrowing of 0.5 per cent of GSDP will be allowed to states, contingent on these reforms," she said.

These steps assume significance in view of India's net zero target by 2070.

Commenting on the budget proposals, Debasish Mishra, Partner & Chief Growth Officer, Deloitte South Asia said, "Nuclear power, which is clean and essential for base load, is key to India's energy transition from fossil fuel. Very crucial reforms to immediately focus on small modular rectors and amend law to expand investment from private sector and the liability cap will go a long way to achieve target of 100 GW by 2047."

Anup Narang, ALPS Hearing Research said, "A well thought out budget which assures savings for the middle class and aims to improve their standard of living. It's a well-planned budget that supports both individuals and the nation's progress."
“With a keen focus on financial prudence and people-centric policies, this budget paves the way for a more prosperous and thriving nation," says Dr Jatin Chaudhry, founder Sharnam Healing Centre and sports injury management specialist.