Budget 2014: Major advantage for under-construction power projects

Extension of ten year tax holiday for power projects which begin generation, distribution and transmission of power by FY17 provides a major advantage for under-construction power projects.

Jaiprakash power will a major beneficiary as the company has nearly 3300 MW of power projects under construction. These projects are expected to be commissioned over the next three years. The company will benefit from the tax holiday provided in this budget.

The reduction in the customs duty on wind power and solar power equipment from 10 to 5% will reduce project costs of companies in solar and wind power generation. Orient Green, Ujhas Energy are the major listed companies involved in the wind and solar power generation sector.

In addition, Tata power is also expected to benefit from this praposal. On a long term basis, the company intends to have 20% of its generation capacity in clean energy, which includes hydro, wind and solar. The company may benefit from the lower customs duty of wind and solar equipments.