Yesterday at 8:30 PM, we all were witness to a very big move made by the Modi government to tackle the problem of undeclared income, demonetizing INR 500 and INR 1000 rupee notes. All the citizens have been asked to exchange their existing such notes from the banks for new ones (refer). This is a huge move which was kept absolutely secret from the public until 8:30 PM yesterday and has been implemented from today at 12 AM.
I’m sure those with black money have been left stumped & have had a sleepless night and will have more ahead. In my opinion, this demonetisation has been an extremely bold and revolutionary move to tackle those with black money with partnerships also made with other countries to track people who transfer money in their banks abroad. Here’s a document (refer) released by the government which briefs out the move and lists places where INR 500 and 1000 rupee notes will be accepted.
But, let’s now have a brief look at the kind of an impact this will have in the Solar Industry.
New 500 & 1000 Rupee Notes May Reduce Corruption and Expedite Approvals for Solar
The move is set to have a long term benefit in the industry in terms of all the liaising work involved in Solar Projects which includes subsidy applications and net-metering applications. In Sunkalp’s past experience, submission of subsidy applications has been accompanied with officials from the disbursing agencies asking for bribe to complete the procedure.
With abolishment of the current notes and disbursements of new notes which contain NGC (Nano GPS Chips) (see image below), it’s easy to track concentration of money at any location.
It’s not been clarified yet, where this chip would be placed on note. But, officials will be wary while asking for a bribe limiting the amount demanded. I would not say corruption would get eradicated completely, however, the amount demanded/ slyly asked for in bribe will be reduced substantially preventing black money accumulation.
Edit: It has since been confirmed that the new notes in circulation do not have a nano-chip. Yet to be seen if this was just a rumour or whether this will be introduced in the future.
We hope this makes both the net-metering and subsidy application process clean ones with lesser roadblocks.
More Organizations May Opt for Solar to Utilize Beneficial Accelerated Depreciation
Also, I feel this move would have a huge indirect effect of using solar as a tax saving tool (for all the income that’s declared until 31st March 2017) by using accelerated depreciation. Again, an indirect push to channelizing large sums of money on big projects (which would allow massive tax savings) which might be a contributor in achieving the 100 GW solar target.
We are yet to see what happens on ground and how it would have a positive impact on the Solar Industry if at all it has to.