Union Budget 2025-26: A Vision for Energy and Urban Development
The Union Budget for 2025-26 has set ambitious goals aimed at transforming India’s power sector and urban development. Union Minister for Power and Housing and Urban Affairs, Shri Manohar Lal, emphasized that this budget will initiate significant reforms across six key domains over the next five years. These reforms are designed to enhance India’s growth potential and global competitiveness. Among these domains, the power sector and urban development stand out as critical areas of focus.
Transformative Reforms in the Power Sector
The 2025-26 budget marks a pivotal moment for India’s power sector. It aims to implement transformative reforms that will not only drive economic growth but also ensure a sustainable and resilient energy future. Union Minister Shri Manohar Lal highlighted the government’s commitment to improving the financial and operational stability of electricity distribution companies. This commitment is crucial for enhancing the overall efficiency of the power sector.
One of the key initiatives in the budget is the exemption of customs duties on scrap materials, including lithium-ion batteries and other critical minerals. This decision is expected to secure the availability of essential materials for battery manufacturing in India. By promoting local production, the government aims to create more job opportunities for the youth. Additionally, the budget proposes to add 35 capital goods to the exempted list for electric vehicle (EV) battery manufacturing, further supporting the growth of the EV sector.
The focus on nuclear energy is another significant aspect of the budget. The government has set an ambitious target of developing at least 100 GW of nuclear power by 2047. This vision underscores India’s commitment to transitioning towards clean energy sources. The launch of the Nuclear Energy Mission, along with a ₹20,000 crore allocation for research and development in Small Modular Reactors (SMRs), marks a significant step forward in this direction.
Strengthening Urban Development Initiatives
Urban development is another critical area highlighted in the Union Budget 2025-26. The government recognizes the importance of sustainable urban growth in enhancing the quality of life for citizens. With rapid urbanization, cities face numerous challenges, including infrastructure deficits, pollution, and housing shortages. The budget aims to address these issues through targeted investments and reforms.
Shri Manohar Lal emphasized the need for modern infrastructure in urban areas. The government plans to allocate funds for the development of smart cities, which will incorporate advanced technologies to improve urban living. These smart cities will focus on efficient waste management, sustainable transportation, and enhanced public services. By investing in urban infrastructure, the government aims to create more livable cities that can accommodate growing populations.
Moreover, the budget proposes incentives for private sector participation in urban development projects. By encouraging public-private partnerships, the government hopes to leverage additional resources and expertise. This collaborative approach will facilitate the implementation of innovative solutions to urban challenges. The focus on urban development aligns with the government’s broader vision of creating a sustainable and inclusive economy.
Commitment to Clean Energy and Sustainability
The Union Budget 2025-26 reflects a strong commitment to clean energy and sustainability. The emphasis on nuclear energy and the promotion of electric vehicles are key components of this commitment. Shri Manohar Lal stated that the focus on nuclear energy will not only strengthen the country’s power infrastructure but also reduce dependence on conventional energy sources.
The allocation for research and development in Small Modular Reactors (SMRs) is a significant step towards achieving energy security. The government aims to operationalize at least five indigenously developed SMRs by 2033. This initiative will position India as a leader in advanced nuclear technology, contributing to the global clean energy transition.
In addition to nuclear energy, the budget’s support for electric vehicle manufacturing is crucial for reducing carbon emissions. By promoting the use of electric vehicles, the government aims to create a cleaner and more sustainable transportation system. The exemption of customs duties on essential materials for battery production will further enhance the growth of the EV sector.
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