Government Assistance for Wind Power Development

The federal Indian government initially sought to support increased power generation from wind turbines in the 7th National Five Year Plan (1985 to 1990). The Ministry of New and Renewable Energy (MNRE) has since developed a range of policy measures and fiscal incentives to encourage the development of wind farms. In addition, state governments have launched a range of incentive-based measures that are not addressed here. These schemes were aided by the passing of the federal Electricity Act in 2003, which paved the way for setting up State Electricity Regulatory Commissions (SERCs), which has fostered an atmosphere conducive to the rapid development of power generation throughout the country. The central government and a number of state governments and union territories have extended fiscal and financial concessions to the wind energy sector. Presently, wind farm projects qualify for accelerated depreciation under the Income Tax Act and also a tax holiday as infrastructure projects. Additionally, the Indian Renewable Energy Development Agency Ltd (IREDA), incorporated as a public limited government company under the control of MNRE, provides preferential loans for wind turbine installation and development. Additionally, projects set up in North Eastern States and Sikkim, Uttaranchal, Jharkhand, Chhattisgarh, Islands, estuaries and Jammu & Kashmir are eligible for certain concessions. Together, these measurs have helped to make wind farms commercially viable in India.

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