Need tax revenue to fund innovation in India’s push for green power: FM Sitharaman

Union finance minister Nirmala Sitharaman

India's transition to renewable energy depends on the tax revenue in the absence of global funds and on the innovation of developing batteries for storing it, Finance Minister Nirmala Sitharaman said on August 13.

“India has moved ahead on transition from fossil fuel to renewable energy with our own funds. India is investing heavily, moving to renewable energy on its own strength. We cannot wait for global funds. For the transition to renewable energy to be sustainable, innovative solutions are needed. The money through taxation is needed to fund research,” Sitharaman said while delivering the keynote address at the 11th convocation of the Indian Institute of Science Education and Research at Bhopal.

India’s taxes cannot be brought to nil due to these challenges that are before the country, she said. “I wish I could bring down taxes to nil, but our challenges are severe.”

The Finance Minister said that in order to sustain the renewable energy, India needs to develop battery capacities for storage for which funding towards research and development is needed, which is done through the taxpayers’ money.

“India needs to move ahead in storage of renewable energy. We will have to move out of fossil fuels. Innovations will help to have greater reliance on renewable energy. We do not have the capacity to store solar energy. Innovations are needed towards batteries of scale to store renewable energy to such an extent,” she said. Till the time India gets a lead in battery storage, the country will depend on fossil fuels like coal and crude oil.

Talking about the measures that the government has taken to fund the R&D activities, Sitharaman said that in March 2024, the Cabinet approved an allocation exceeding Rs 10,300 crore to develop AI capabilities. Moreover, India has set up three units for assembly, testing, packaging of semiconductor chips.