New Delhi: In a bid to boost clean energy generation in the country, the government today amended the Power Tariff Policy, which mandates states to have solar energy as 3% of their total power purchases by 2022, reports PTI.
"The solar power purchase obligation for states may start with 0.25% in phase I (by 2013) and go up to 3% by 2022," an official statement said.
The decision was taken at a meeting of the Cabinet held here today, it added.
"The present amendment in the Tariff Policy is as per the National Solar Mission Strategy, which was approved by the Cabinet on 19 November 2009," the statement added.
As per the amendment, the power purchased by the state electricity boards or other state utilities will be complemented by solar specific Renewable Energy Certificate (REC) mechanism, through which solar power generation companies will sell certificates to the buyers.
The certificate will also help the buyers to meet their solar power purchasing obligations, the statement said.
Earlier, the ministry of power had asked the Cabinet to amend the tariff policy 2006, so that state electricity regulators can fix a percentage of energy purchased from solar power.
The amendment will come into effect from the date of its publication in the official gazette, the statement added.
Washington/New Delhi: The International Monetary Fund (IMF) expects Indian economy to grow by 8.8% during the current financial year, up from 7.4% a year ago, mainly driven by robust growth in farm sector and pick up in consumption, reports PTI.
The multilateral lending agency, however, expressed concern over rising prices and underlined the need for controlling inflationary expectations by more monetary actions by the Reserve Bank of India (RBI).
"The Indian economy is projected to grow by 8.8% in 2010-11...This year's growth is already benefiting from the rebound in agriculture and pick up in private consumption and employment prospects have improved and disposable income continues to rise," the IMF said in a report after Article IV consultations with the Indian officials.
The economy expanded by 8.9% during the first half of the current fiscal and, according to the government estimates, may revert to the pre-global crisis level of 9% growth.
However, the IMF has projected moderation in growth form the current high levels to 8.1% in the next fiscal.
Listing rising prices as a major area of concern, the IMF said the RBI could take more monetary steps to contain inflationary expectations.
"We see room for further rate increase (by RBI) but at the same time it has to be done gradually and needs to be looked at continuously," senior resident representative of the IMF Sanjaya Panth told reporters in Delhi.
Food inflation, according to the data released by the government, rose to the yearly high of 18.32% for the week ended 25th December. The overall inflation was 7.48% in November.
The inflation, according to IMF, could moderate to 6.5% by March end.
Besides inflation, high capital inflows and uncertainty in the global economy are the other areas of concern that could impair growth.
"Risks to growth are broadly balanced with downside risks relating mainly to the global economy. Surging capital inflows could further spur investment but could complicate macroeconomic management", the report said.
In 2010, the overseas portfolio investment more than doubled to $39 billion from $18 billion a year ago.
According to Mr Panth, "The current inflows are in comfortable zone and there is no need for capital control.
However, inflows could increase absorptive capacity in future."
Following the global financial meltdown, the growth rate of the India economy slipped to 6.7% in 2008-09 from over 9% in the previous three years.
Driven by stimulus packages provided by the government, the growth rate picked up to 7.4% during 2009-10.
In its annual assessment of the world's fastest growing economies, IMF, however, said that India should speed up its return to pre-crisis monetary and fiscal policies to keep the economy in check.
In its report, the IMF backed the government's policy of exiting the stimulus measures implemented in the past two years.
The IMF economists, however, preferred tightening of fiscal policy, as they felt that the stimulus exit strategy remained incomplete given the high level of government debt and large capital inflows.
The IMF also supported the objective to raise public investment, especially in infrastructure, and to improve social outcomes.
With tax reforms designed to be revenue neutral, IMF economists see the need for subsidy reforms-particularly liberalization of diesel and fertiliser prices-coupled with more efficient spending.
"A commendable first step in fuel price liberalization has been taken and promising tax reforms are in the works," the report said.
The IMF said the current account deficit is projected to reach 3.3% of GDP in 2010-11 and 3.5% next year.
The deficit has so far been financed mainly by foreign direct investment and equity inflows, but the authorities need to keep an eye on the level of the current account deficit, it said.
Washington: Two Asian giants, India and China, would continue to lead the economic growth story of this continent as this past year, reports PTI quoting a top International Monetary Fund (IMF) official.
"We expect growth to remain strong. We expect it to settle at a more sustainable rate of about 7% for Asia as a whole, slightly down from 8% in 2010. We see China and India continuing to lead Asia's growth," IMF head (Asia-Pacific) Anoop Singh said yesterday.
"Despite this positive outlook, there are still downside risks, but these mainly come from the external environment: the risk that global growth could be weaker than we anticipate.
Also financial spill-overs from advanced countries, especially in Europe, could be another source of concern, and constitute another downside risk," Mr Singh said in interview to the IMF online survey.
However he warned that the strength of Asia's growth could lead to the threat of inflation.
Asia had to contend with the risks posed by possibly weaker global economic growth and financial spill-overs from advanced economies, he suggested, but predicted that the region's economic importance would continue to increase, he added.
"I think what you've been seeing in the last decade has been the further rise of Asia, and this time I will say it is a large part due to the rapid growth in China and India and this is expected to continue over the medium and the long term," Mr Singh said in response to a question.
Certainly the region has a certain dependence that needs to be rebalanced so that the momentum comes from a broader set of policies, he said.
"It is true that across Asia the region has been more dependent on exports than other emerging markets in the world.
And, therefore, in order to maintain these high growth rates, we do believe the region should reduce its reliance on export growth and we have emphasised the importance of rebalancing. That is, to raise domestic demand in Asia. This is also a major topic in our discussions with countries in Asia," Mr Singh said.
In 2011, he said Asia will face two set of challenges.
The first will involve managing the timing and exit from policy stimulus that many countries in Asia have used.
"This is because output is growing above potential in most economies. In fact, output gaps are closing and inflation pressures are emerging. So, our view is that although many countries have taken steps to remove monetary stimulus, there still is further room to remove policy stimulus," he said.