Power and Renewables Budget Allocations in Line: Key Highlights from Union Budget 2026–27

The Union Budget 2026–27 has once again shone a spotlight on India’s energy landscape. While allocations for the power and renewable energy sectors broadly matched market expectations, the focus remains on executing existing government schemes rather than introducing new policy triggers.

For investors and industry watchers, the numbers reveal continuity and commitment in the renewable energy push, but the immediate market impact is expected to be moderate. Here’s a detailed breakdown of what the Budget holds for the sector.

Market Performance

The power and renewable energy sector continues to see steady government support. The overall allocations reflect ongoing scheme execution rather than new policy announcements. Key takeaways include:

• Net allocation for Ministry of Renewable Energy: Rs 32,914.67 crore in BE 2026–27, up from Rs 25,301.22 crore in BE 2025–26. This represents an increase of Rs 7,613.45 crore or approximately 30.1%.
• Combined allocation for power, including renewables: Around Rs 2.99 lakh crore for FY27, nearly 39% higher than FY26 revised estimates.

The Budget prioritizes continuity and scale-up, ensuring schemes already in motion continue to gain traction.

Main News

The budgetary focus emphasizes solar energy, rural electrification, and green hydrogen initiatives:

• Solar energy allocation: Rs 30,539.36 crore, up 32.1% from the previous year. This increase primarily supports the PM Surya Ghar Muft Bijli Yojana.
• National Green Hydrogen Mission: Allocation doubled to Rs 600 crore, reflecting government interest in emerging clean energy technologies.
• IREDA (Indian Renewable Energy Development Agency) support: Increased by 15.4% to Rs 40,064.74 crore, providing sustained investment support for renewable projects.

The Revamped Distribution Sector Scheme (RDSS) continues to receive substantial attention, with smart metering installations showing strong growth. The government has committed around Rs 97,000 crore under RDSS to improve the distribution infrastructure, which also drives the increase in overall power sector allocations.

Company Details and Sector Impact

While the Budget lays out significant allocations, the allocations are mostly targeted toward existing programs:

• PM Surya Ghar Muft Bijli Yojana: Enhanced funding ensures continued solar deployment in households.
• KUSUM scheme: Allocation rises by 66%, supporting solar component manufacturing and rural electrification.

These measures are designed to create consistent demand, improve infrastructure, and boost the fiscal health of rural power utilities.

Summary

The Union Budget 2026–27 demonstrates the government’s steady commitment to India’s power and renewable energy sectors. Key points to note:

• Net allocations for renewable energy have grown by 30.1%, emphasizing solar and green hydrogen.
• Combined power sector allocation reaches Rs 2.99 lakh crore, up nearly 39% from FY26.
• Existing programs like PM Surya Ghar, KUSUM, and RDSS continue to benefit from higher funding.
• The focus remains on execution rather than new policies, ensuring continuity and scaling up of ongoing initiatives.

Overall, the Budget reinforces India’s clean energy ambitions and strengthens the backbone of renewable energy schemes, providing the sector with the resources needed to expand efficiently.

Source: Moneycontrol