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Budget 2012: Banks Should Be Allowed to Lend More to Power Sector, Says Sumant Sinha, Renew Wind Power

  • In an interview with ET Now, Sumant Sinha, CEO, Renew Wind Power talks about his expectations from the Union Budget 2012-13.

  • Do you anticipate some serious policy push?

  • I hope it is going to be a game changer. A lot depends upon what happens between now and March 15th from a political standpoint. A lot of that cannot be factored into the actual budget equations. I would have to assume that a lot of the political developments will not actually feed into the budget. It will probably be a tick in the box.

  • Do you not think we need to fix the fisc and that needs to be done this budget because we are precariously positioned, we cannot have a populist budget, it has to be a prudent budget...

  • The government has to do something about getting the fiscal deficit under control. The target last year was about 4.5%. It is going to probably end up this year, at anything between 5.5 and 6%. There may be slippages on a number of different areas, both on the spending side as well as on the revenue side.

  • That is a level of deficit that we as a country just cannot afford. Out total debt to GDP numbers are ticking up because the government is borrowing $20 billion more this year than it had originally targeted for. That has a crowding out impact for investment. Getting the fiscal deficit under control has to be the Finance Minister's No. 1 priority this year.

  • The power sector has been looked at as one space that has crippled a large number of other sectors. What is your expectation on the power sector in the budget?

  • The power sector is in a total mess right now and we need to have a number of changes that take place. Unfortunately power is not just essentially a government responsibility, it is also the responsibility of states as it is a concurrent sector. A lot of things fall between the cracks at both ends.

  • On the conventional power side, resolving the Coal India issues is an important issue. Improving the general financial health is important as well. That hopefully will began to happen now that the CRC has mandated the state electricity regulatory commission start increasing tariffs.

  • Banks have to be allowed to lend a little bit more to the power sector. Within the power sector is the issue of renewable energy and that is an area that the government can also push in terms of growth to drive the sector forward.

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