Prime Minister Narendra Modi announced on Tuesday (6 February) that India will allocate a significant portion of the planned Rs 11 lakh crore infrastructure spending in next year's budget to the energy sector.
This move aims to address the nation's escalating demand for energy resources. The Prime Minister was delivering the opening speech at the second edition of India Energy Week, attended by both Indian and global audiences.
Highlighting India's unparalleled infrastructure drive, he noted that the recently presented interim budget has allocated Rs 11 lakh crore towards this endeavour.
“A big part of this will go to the energy sector. This amount will create assets in railways, roadways, waterways, airways, and housing which will need energy leading to India’s efforts to expand its energy capacity,” he said.
The Interim Budget for 2024 has raised the capex outlay for the coming financial year (FY 2024-25) to Rs 11.11 lakh crore. The allocation for capital expenditure for the financial year starting 1 April is 11.1 per cent higher than the capex for the current fiscal year, Finance Minister Nirmala Sitharaman said on 1 February, in her budget speech.
Observing that India is on the brink of becoming the world's third-largest economy, Prime Minister Modi emphasised that the energy sector would play a crucial role in India’s growth story.
He mentioned that India's primary energy demand is projected to double by 2045, prompting the country to initiate efforts toward the development of affordable and sustainable energy solutions.
India is the third largest energy consumer in the world after China and USA and also one of the fastest growing energy consumers. In the year 2019, the primary energy consumption in the country was about 813 million tonnes of oil equivalent (Mtoe).
According to a report titled “India Energy Outlook 2021” released by the International Energy Agency, over 80 per cent of India’s energy needs are met by three fuels: coal, oil and solid biomass.
Coal has strengthened its role as the dominant energy source, maintaining its strong position in power generation as well as being the fuel of choice for many industries (especially heavy industries such as iron and steel).
Oil consumption has grown rapidly on account of rising vehicle ownership and road transport use. Biomass, primarily fuelwood, makes up a declining share of the energy mix, but is still widely used as a cooking fuel.
Emphasising the fact that India will see an investment of $67 billion or about Rs 5.5 lakh crore in the energy sector in the next five to six years, Prime Minister Modi invited global players to participate in India’s energy sector growth.
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