Long term growth drivers remain intact for wind firms: ICRA
ICRA has come out with its release on Wind Energy Project. The research firm says, end of Accelerated Depreciation benefit to impact wind based capacity addition in near term, but long term drivers remain intact.
April 09, 2012 / 14:33 IST
ICRA has come out with its release on Wind Energy Project. The research firm says, end of Accelerated Depreciation benefit to impact wind based capacity addition in near term, but long term drivers remain intact.
For wind energy projects, the tax benefit available in the form of accelerated depreciation (AD) has been discontinued with effect from April 1, 2012. While this is in line with the earlier provisions announced in December 2009 for the Generation-based Incentive (GBI) framework by the Ministry of New & Renewable Energy (MNRE), Government of India, there were expectations of further extension of this benefit at least till March 31 2013, given the delays in the implementation of the proposed Direct Tax Code (DTC). While this benefit has been ended, there is still lack of clarity over the continuation and amount of GBI benefit applicable (for capacities commissioned after March 31, 2012).ICRA estimates that the overall domestic wind-based capacity addition during FY2012 increased to about 3,000 MW (against 2,350 MW in the previous FY), driven mainly by growing demand from the independent power producer (IPP) segment. While the share of consumers availing themselves of the AD benefit (mainly retail consumers, financial investors or captive consumers) declined gradually to 40-45% in FY2012 from the earlier 70-75%, the same still remains sizeable. In ICRA
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