Government to consider tax incentive for wind sector

After reinstating generation-based incentive (GBI) for the wind sector, government is likely to enforce a tax benefit scheme as well for the wind farm developers. Ratan Watal, secretary, ministry of new and renewable energy told reporters, " GBI is for big independent players while accelerated depreciation (AD) or any such form of tax benefit would attract entrepreneurs in the wind sector."

After a hiatus of one and a half year without any subsidy or incentive scheme, cabinet approved GBI with a retrospective effect for the wind sector. No decision was however taken on AD.

"We are looking at a different form of AD, tax regime or a new financial regime for small players who want to earn some tax benefit on their investments," said Watal.

He said that historically AD has attracted new players in the wind market. "By next financial year, a new tax regime for the wind sector would be in place," said Watal.

AD has been in force for the wind industry since 2003 till 2012 when its was withdrawn. 17,000 mw of wind power was added in the nation's grid during this period.