National Clean Energy Fund
The National Clean Energy Fund was introduced in 2010-11 to finance research and innovation projects falling under clean energy technologies. These included projects on renewable energy initiatives, infrastructure, and projects identified to combat climate change. It has been renamed to National Clean Energy and Environment Fund (NCEEF) in 2017 to include the clean environment initiatives. The fund was collected by imposing a tax of Rs 501 on every ton of coal produced. With the hike in tax collection over the years to Rs 4001, along with the increase in production of coal, the NCEEF has grown to become a well-financed fund. Despite of being a self-sufficient corpus, the irony is that the proportion of funds utilized for the clean environment projects has been extremely low. Over the past six years Rs 50,000 crore1 has been collected, out of which less than half1 has been allocated for NCEEF, whereas only Rs 10,000 crore1 has been used to finance the projects.
However, with the introduction of GST, the cess generated from NCEF will go to the GST compensation fund which represents the funds meant to compensate various state governments for any potential loss in revenue arising out of GST implementation. This deteriorates the initial purpose of creating the fund, which was formed to combat change in climate. India, being a developing economy needs those funds to respond to climatic hazards and to develop the country by utilizing it in renewable energy initiatives. Now, when the tax collected will feed the GST fund, there will not be any funds left for NCEEF.