Govt Likely To Offer Big Relief To Mega Power Projects | ET NOW Exclusive | Business News | ET Now
•February 18, 2026
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Why It Matters
The exemption lowers capital costs and regulatory uncertainty, likely spurring new mega‑power investments and strengthening India's electricity supply.
Key Takeaways
- •Government may grant full mega‑power policy benefits to projects
- •Customs and excise duty exemptions apply to power equipment purchases
- •Relief offered regardless of power purchase agreement type or section
- •Up to 85% capacity projects with long‑term PPAs qualify
- •Final cabinet note on 2009 mega‑power policy nearing approval
Summary
Government sources indicate the cabinet is poised to approve sweeping relief for India's mega‑power projects, granting full benefits of the 2009 Mega Power Policy. The relief centers on customs and excise duty exemptions for power‑generation equipment, extending to provisional projects regardless of whether a power purchase agreement (PPA) exists.
The proposal offers 100% policy benefits, allowing projects with long‑term PPAs covering up to 85% of capacity to claim exemptions. It also removes the current distinction between Section 63 competitive‑bidding contracts and Section 62 cost‑plus arrangements under the Electricity Act, applying uniformly across all PPA types, including those under the LCT Act 2003.
Sources quoted the ministry’s final cabinet note, noting that inter‑ministry consultations are complete and the document recommends unconditional exemption. The language emphasizes that “benefit may be provided irrespective of the power purchase agreement,” signaling a decisive policy shift.
If enacted, the measure could slash upfront capital costs, accelerate project financing, and attract new private investment, bolstering India's capacity expansion and addressing chronic power shortages.
Original Description
#ETNOWExclusive | The Govt is likely to provide big relief to mega power projects in the country, as per sources.
#power #cabinet #stockmarket
control your money with economic times now.
#etnow #businessnews #budget2026withetnow
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