Clean energy infrastructure may be included in harmonized master list

The Centre is looking to include new clean energy ‘sunrise’ sectors with thriving potential into the Harmonized Master List of Infrastructure, Business Standard has learnt. These could include renewable energy infrastructure (infra) across wind, solar, hydrogen, and digital infra sub-sectors.

This is part of the efforts by the central government — as announced by Finance Minister Nirmala Sitharaman in her 2023-24 Union Budget — to overhaul the list to reflect the economic realities and priorities of the current and future decades.

“The economy from 2012 (when the Master List was first made) to today has undergone a sea change. Sectors keep evolving and new sectors keep emerging. Digital infra is an example, and so is clean energy infra. The committee will take a holistic view and offer its recommendations,” said a senior government official.

“The Harmonized Master List of Infrastructure will be reviewed by an expert committee for recommending the classification and financing framework suitable for Amrit Kaal,” Sitharaman had said in her latest Budget.

Another senior official said that the Centre is in the final stages of setting up this committee. It is likely to be headed by a prominent infra or economic policy expert and will include officials from the Ministry of Finance, infrastructure ministries, and private sector and domain experts.

The present-day Harmonized Master List was first brought out in 2012 to delineate sectors that could be termed as ‘infrastructure’. It comprises five broad categories, with five to 15 sectors in each category.

The categories are transport and logistics, energy, water and sanitation, communication, and social and commercial infrastructure. It was created after a panel, headed by the former Reserve Bank of India (RBI) governor, laid out the parameters under which infra sectors could be defined.

Some of the parameters to include new sectors are national importance, contribution to the economy, employment potential, etc.

India has set ambitious green energy and green fuel targets, although the cost of financing these new-age sectors remains higher in comparison to their fossil fuel counterparts.

Solar and wind energy projects in the country have traditionally faced high interest rates, along with absence of dedicated agencies to fund renewable energy projects. Leading sector majors are increasingly relying on foreign sovereign funds, private equity and pension funds, following dearth of attractive financing in the country.

The RBI in 2022 categorised the renewable energy sector under priority sector lending (PSL) for loans up to a limit of Rs 30 crore. However, a parliamentary standing committee the same year recommended that the loan limit for the renewable energy sector under PSL be increased since Rs 30 crore is insufficient for large projects.

Small-sized projects below 500 megawatt are not offered anymore in the tenders by central government agencies.

In January this year, the Union Cabinet approved an initial outlay of Rs 19,500 crore for the National Hydrogen Mission, which was launched by Prime Minister Narendra Modi in his address on India’s 75th Independence in 2021. The mission will have four components which will aim at enhancing domestic production of green hydrogen and promote the manufacturing of electrolysers — a key component for making green hydrogen.

What is the HARMONIZED LIST

• The list was first brought out in 2012, to define ‘infrastructure’sectors  
• Comprises 5 broad categories, with 5 to 15 sectors in each category
• Categories are transport and logistics, energy, water and sanitation, communication, and social and commercial infra
• Created after a panel led by former RBI governor laid out the parameters under which infrastructure sectors could be defined