During the Union budget 25-26 presentation, the finance minister allocated INR 26,549.38 crore to the Ministry of New and Renewable Energy, up 53.48% against revised Estimates of INR 17,298.44 crore a year ago. The allocation has increased by 904% since FY21. Additionally, to boost the Indian EV market, the government has taken some significant steps. 

Renewable Energy 

The government has allocated INR 24,224.36 crore out of the total amount towards solar energy. The budget allocation mainly includes:

• INR 1,500 crore towards solar power (grid)
• INR 2,600 crore towards Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM) 
• INR 20,000 crore towards PM Surya Ghar Muft Bijli Yojana. 

Furthermore, the government has announced a new manufacturing mission under the ambitious Make in India initiative. This strategic move aims to incentivize the production of solar photovoltaic (PV) cells, electrolyzers, and grid-scale batteries.

Here is a comparison of the budget allocation in the renewable energy sector in comparison with previous fiscal year:

These allocations will boost India's renewable power market. Additionally, the government has also allocated INR 600 crore for the National Green Hydrogen mission. Apart from renewables, the government is focusing on India's nuclear power program. Union Budget 2025 sets an ambitious target of developing 100 GW of nuclear capacity by 2047 This move will strengthen long-term energy security. The budgetary allocation for nuclear power projects across India for 2025-2026 is INR 2,086 crore.

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Boosting the Indian EV Market 

The government has announced plans to set up a national manufacturing mission to support the Indian EV batteries market. The government will focus on small, medium, and large industries (MSME).

Finance Minister Nirmala Sitharaman has also announced the exemption of customs duty (BCD) on cobalt powder, the scrap of the lithium-ion battery, lead, zinc, and 12 more critical minerals that will aid the lithium-ion battery market in India.

Additionally, the government has allocated INR 410 crore for the National Critical Mineral Mission in the budget estimate for 2025–26.

Also Read: Union Budget 2024-25: Additional Support for Energy and Infrastructure Projects

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