Government's proposal to double the clean-energy cess on coal may lead to increase in power tariff for consumers, with state-run behemoth Coal India Ltd itself anticipating an impact of Rs 5,000 crore.
The cess is presently levied on coal, peat and lignite to finance and promote clean energy initiatives and fund research in this area.
"In indirect taxes, I propose to increase the Clean Energy Cess from 100 to 200 per metric tonne of coal, etc to finance clean environment initiatives," Finance Minister Arun Jaitley said while presenting the Budget 2015-16.
According to Coal India source, the "impact would to the tune of Rs 5,000 crore. But it would be passed on the power consumers".
The impact on power tariffs would be about 4 paise per unit, said the source.
From the increase in cess it is likely that the cost of generation would go up by 5-6 paise per unit, NTPC said.
Reacting to the development, JSPL's Managing Director and CEO Ravi Uppal said: "It will increase the energy charge... It will make a difference of 10-12 paise per unit of power."
In the last budget, the government had increased the cess to Rs 100 from Rs 50 per tonne.
Debasish Mishra, Senior Director (Consulting) Deloitte Touche Tohmatsu India Pvt Ltd said: "Clean energy cess of Rs 200/tonne of coal would result in consumer paying 6 to 7 paise per unit of power, which is not significant.
"This is a step in right direction and along with the target to achieve 175 GW of renewable energy capacity by 2022, it demonstrates India's commitment to tackle climate change."
He said the money collected through coal cess should be clearly be made available in research to reduce costs of renewable energy and spending in green transmission grid.
Yesterday, the Economic Survey 2014-15 said that there should be a five-fold hike in coal cess to around Rs 500 per tonne from the existing level of Rs 100 per tonne in order to bring down carbon emissions drastically.
This would still be within the range of keeping most coal power plants profitable given the current tariff structure, it had said.
The country began imposing clean-energy cess on raw coal and lignite in 2010.
