Renewables have been the largest beneficiary of the coal tax revenue collected in India over the last seven years
India has set a goal to generate 175 GW of energy from renewable sources by the year 2022, a rather ambitious plan given its current renewable capacity is around 46 GW. The country has also pledged to reduce emissions by up to 35% below 2005 levels by 2030. In 2010, the government announced that a coal tax would be imposed, in order to eliminate its use and fund renewable energy projects at the same time. The coal cess (tax) of Rs 50/tn was levied on both locally mined and imported coal and was subsequently increased a number of times to the present level of Rs 400 per ton.
Earlier this year, the Ministry of Finance revealed that it has allocated Rs 12,430 crore ($1.8 billion) from the National Clean Energy Fund to the Ministry of New & Renewable Energy between 2010-11 and 2016-17. That sum of money corresponds to 40% of the total share of the money collected over the last seven years (Rs 54,336 crore ($8 billion)).
However, this percentage is considerably low and the government is being criticized for misusing the coal cess revenue, as it aims to have 100 GW of operational solar power capacity by March 2022, while there are clearly not enough rooftop solar power systems and solar power parks installed.
Apart from solar and other renewables, the program has helped support drinking and water sanitation projects, river restoration, and reforestation efforts, with these sectors having collectively received Rs 5,039 crore ($750 million) over the last seven years.