Finance minister Arun Jaitley said on Tuesday that the ongoing auction of coal mines would help ensure cheaper electricity to the common man in a sustained manner, as against the practice of states subsidising power.
The minister, who will present the union budget in the Lok Sabha on 28 February, said India is better placed to provide investment opportunity to the global and domestic investors.
"The starting point of all this has to be the credibility of the Indian economy, the faith of people in the Indian economy and our ability to provide opportunities to investors.
"From that point of view, our own systems have to tune a lot and for each one of these [goals], power is essential," he said while addressing a renewable energy conference 'Re-Invest 2015' in New Delhi.
Referring specifically to the ongoing auction of coal mines, he said the reverse auction process will ensure cheaper electricity to the common man as against the practice of certain states giving power subsidy.
"In reverse bidding, the cost of power is going to be linked with the rate at which you get the fuel," Jaitley said.
He said state subsidies are not sustainable. "One way by which people want to provide cheaper electricity is by the state subsidising it. A state subsidy really means that you will have to tax people more in order to provide something free to some other people. Is that a sustainable cause?" he asked.
Taking the first step towards slashing power tariff by 50 per cent, the Delhi government on Monday directed finance and power departments to immediately send their proposals for its implementation.
Aggressive bidding is going on for the first tranche of the coal mines auction which is expected to be completed by 22 February.
On clean energy, Jaitley said it would be incompetent of the country if it failed to harness its solar and wind resources.
"The world today is increasingly moving towards cleaner energy ... it's a great resource provided by nature both for solar and for wind. India has a very large landmass and therefore the raw material required for it is right in front of us. It would be sheer incompetence if we are not able to convert these into resource," he said.
The current government is focusing more on solar and wind energy, and the finance minister is likely to announce tax incentives for the sector in his upcoming budget.
At a time when many advance economies are facing challenging times, Jaitley claimed that international investors are reposing faith in India.
"Our friends in the BRICS are facing a challenge. China has now changed its strategy... it's also shifting its emphasis more on consumption, more on the services sector; and therefore there is a great opportunity for India to grow in terms of our manufacturing.
"Not only grow in terms of our manufacturing we also have to concentrate on our infrastructure. And therefore we have to look at our resources both within the country and outside the country, which are going to help in this whole process," he said.
Jaitley further said that in today's environment occasions come very rarely where "you can become a natural recipient of both domestic and international investors".
The finance minister said the three-day 'Re-Invest 2015' is a take-off conference; and "once we succeed in renewable energy, we succeed in job creation, filling power generation gap and economic growth".