Development Watch – Week #1 February ’24
Development News
ONGC-NTPC JV pact for renewable energy
India’s top oil producer ONGC and biggest power firm NTPC signed a joint venture agreement to set up offshore wind energy projects. The two firms look to boost collaboration in renewable energy. The pact was signed during the India Energy Week. ONGC has received government approval to establish a new unit, ONGC Green Ltd. for its gas business and clean energy projects like green hydrogen. The agreement encompasses ventures in offshore wind projects while also delving into potential opportunities in storage, e-mobility, carbon credits, green credits, green hydrogen business, and its derivatives such as green ammonia and green methanol.
Viability Gap Funding for Offshore Wind Energy
The Indian Finance Minister has said that the government will provide viability gap funding for 1 GW offshore wind energy. India has target of 500 GW of renewable energy capacity by 2030. Viability gap funding will also be provided for harnessing offshore wind energy capacity of 1 GW for achieving net-zero emissions by 2070. The government is ready to assist states in faster development of aspirational districts and blocks.
Sustainable Finance for development
Sustainable finance began to pick up momentum after global and national climate targets were announced under the Paris Agreement. The term ‘sustainable development’ was coined by Brundtland Commission way back in 1987 in their landmark report ‘Our Common Future’. However, progress on finding sustainable finance has been slower than expected. The conflicts raging in Europe and Middle East have further lowered appetite in the West for low-carbon production and consumption. Slower economic growth is also a factor. The European Union’s imposition of protective levies in form of border adjustment of carbon taxes from 2026 reflects this compulsion. This is happening in the backdrop of ambitious declarations of commitment to net zero by the mid-century. In a globalized world, no corporate entity or country wishes to surrender its access to low-cost energy and competitive advantage.
Rs. 2.55 Lakh Cr allocated to Railways in interim Budget
The interim budget 2024-25 has allocated Rs. 2.55 lakh Crores to the Indian Railways during 2024-25. This is a 5.8% increase over the previous year. The FM announced the implementation of 3 major economic railway corridor programs. This includes energy, mineral and cement corridors, port connectivity corridors, and high traffic density corridors. The projects under PM Gati Shakti will enable multi-modal connectivity to improve logistics efficiency and reduce cost. The enhanced amount will also be handy for buying modern Vande Bharat trains, laying new tracks, doubling lines on existing routes and deploying automated train safety tech-kavach across the Railways.
Rs. 2,300 Crores allocated to Civil Aviation
The budgetary allocation for civil aviation ministry is at Rs. 2,300 for FY 24-25 from Rs. 2,922 Crores from last year. Out of the total amount, Air India Asset Holding Ltd (AIAHL) will get Rs. 1,158 Crores in next fiscal. Last year the allocation was Rs. 714 Crores. According to the budget document, the money earmarked for the regulators, DGCA and BCAS, have been reduced for 2024-25. The budgetary allocation for the Directorate General of Civil Aviation (DGCA) will be Rs. 302 Crores and Bureau of Civil Aviation Security (BCAS), the amount will be Rs. Crores. The allocation for PLI Scheme for drone and drone components has been hiked to Rs. 57 crores from Rs. 33 Crores.
Retrofitting of ships to run on Green Hydrogen
The union government will support retrofitting of existing ships to run them on green hydrogen under a new scheme for the sector. The new scheme supports existing ships with a green hydrogen propulsion system. It will also fund the creation of bunkering facilities in ports. The scheme falls under the National Green Hydrogen Mission, with a budget of Rs. 115 Crores till 2025-26. The National Green Hydrogen Mission has a budget of Rs. 19,744 Crores. The Ministry of Ports, Shipping and Waterways will implement pilot projects for replacing fossil fuels with Green Hydrogen in the shipping sector. The Shipping Corporation of India will be the scheme implementing agency for retrofitting ships.
DDA allows bulk-buying of flats by private firms
Private companies, which have a registered office or campus in Delhi/NCR region can now buy DDA flats in bulk and use it as hostel or staff quarters. It is because the Delhi Development Authority (DDA) has amended the DDA (Management and Disposal of Housing Estate) Regulations, 1968. In the authority meeting on Tuesday, DDA has allowed participation of non-governmental legal entities to purchase built-up properties in bulk offered by it. A discount of 15% to the general public and a discount of 25% to employees of Central Government, State Govt. and Government Autonomous bodies would be offered as an incentive for more than 440 flats. DDA has also reported Rs. 7,696 Crores revenue in 2023-23, which is a 75% increase from the previous year. For 2024-25, the DDA has approved an annual budget of DDA for 2024-25 with an outlay of Rs. 8,811 Crores.
Budget allocation for Rural Development up by 12%
The government has increased the rural development ministry’s budget to Rs. 1.77 lakh crores for 2024-25 from last year’s Rs. 1.57 lakh crores. This is an increase of around 12%. A mid-year review of expenditure done by the Ministry stood at Rs. 1.71 lakh crores. The allocation for the flagship Mahatma Gandhi National Rural Employment Guarantee (MGNREGA) Scheme for 2024-25 was Rs. 86,000 Crores. this is 43% more than the Rs. 60,000 crores made in last budget.
MGNREGA provides 100 days of employment in a financial year to 1 member of a household whose adult members volunteer to do unskilled manual work. It also earmarks 1/3 jobs for women. The FM also announced that another 2 Crores houses will be constructed under the PMAY-Gramin in the next 5 years. The allocation for this is Rs. 54,500 Crores in the budget presented.
Under the ‘Lakhpati Didi’ initiative, which comes under the DAY-NLRM, each self help group (SHG) household is encouraged to take up multiples livelihood activities coupled with value chain interventions. This would result in a sustainable income of Rs. 1 Lakh or more per year. National Livelihood Mission-Ajeevika was allocated Rs. 15,047 Crores, which is 6% more than last year’s 14,129 Crores. Allocation for PM Gram Sadak Yojna has come down from Rs. 19,000 Crores from Rs. 12,000 Crores.
Local Feedback
LocalFeedback.org aims to track and document actionable parameters that help improve urban and rural infrastructure. The founder, Susmita, has juggled diverse roles in real estate, project budgeting, valuation and execution on construction sites. Having traveled to more than 20 countries, she has worked across 4 regions in India. Her areas of interest include sustainable buildings, electric mobility and urban development. She visited top-ranking cities on livability indices and has presented published papers at international conferences.