Categories: Energy

Accelerated depreciation (AD) scheme to continue for wind energy projects in India

With a government change at the centre in India, the accelerated depreciation (AD) scheme has been extended for wind projects in India. The scheme was shelved by the earlier government.

“To encourage the wind energy programme, there is an accelerated depreciation. There was confusion whether we have extended it or not. Members wanted it to be extended. I am, therefore, continuing with that accelerated depreciation,” Finance Minister Arun Jaitley informed the Lok Sabha while replying to a debate on the finance bill.

At the end of March, the installed wind power generation capacity stood at more than 21,000 MW. With the removal of the benefits, the wind sector In 2012-2013 saw investments falling to Rs.10,200 crores while in the preceding year, it was close to 19,000 crores.

The two benefits viz. AD (Accelerated depreciation) and GBI (Generation-based incentives) were earlier withdrawn by the government. The Accelerated Depreciation (AD) scheme and Generation-Based Incentive (GBI) scheme were a common practice for wind energy projects which saw more investment by many firms but these twin benefits were withdrawn in 2012. Last year, GBI was restored for the sector leading to some cheer for the industry. An incentive of 50 paise is provided for every unit of electricity generated under the GBI scheme (Generation-based incentives). Accelerated depreciation is a useful tool for deferring corporate income taxes by reducing taxable income in current years; this is done by considering the amount of depreciation each year as higher during the pioneering years of an asset’s life.

Companies frequently make use of accelerated depreciation but this results in fewer earnings initially but this spills over in more profits later on.

AD scheme however is not just limited to the wind sector but is available for other renewable energy investments.

Read more on wind energy in India


Editor in chief

Leave a Comment

View Comments

Published by

Recent Posts

June 2020: Monthly Electric Vehicle News Roundup

1-Apple's Upcoming Electric Vehicle Routing Feature Looks to End Range Anxiety Apple's iOS 14 system introduces a host of new… Read More

3 days ago

Five Electric Vehicles You Can Buy On Alibaba

The lockdown enforced by different countries across the globe in the wake of the Covid-19 pandemic has necessitated that we… Read More

6 days ago

Choose the Raine One for safer, faster and eco-friendly rides

As the world gravitates towards more sustainable transport options, electric scooters are gaining popularity fast for being easy to maneuver… Read More

6 days ago

Uttarakhand to Use Geotextile for Restoration of Bugyal

Permeable fabrics that have the capability to separate, filter, reinforce, protect, or drain when used in association with soil are… Read More

6 days ago

The Rise of Sustainable Investing

The seeds of sustainable investing were sown to serve as one of the means of risk mitigation, but it has… Read More

1 week ago

Aqua kelp jerky: A nutrient-dense, delicious snack that you can’t miss out on

The rampant use of pesticides and insecticides in farming is contributing to the depletion of the ozone layer and makes… Read More

1 week ago