Nov. 30 (Bloomberg) — India may reintroduce a subsidy for wind farms by the end of December after its withdrawal contributed to a 40 percent drop in installations, a government official said.

The Ministry of New and Renewable Energy also plans to increase the subsidy by 60 percent and allow more wind projects to claim it, Dilip Nigam, the ministry’s director of wind policy, said in an interview yesterday in Chennai.

The incentive had helped annual installations in the world’s third-biggest wind market to more than double from 2009 to 2011. After it expired on March 31, India built only 851 megawatts of capacity in the following six months, down from 1,403 megawatts in the previous period, according to data from the Indian Wind Turbine Manufacturers’ Association.

The ministry submitted a proposal to raise the subsidy, known as the generation-based incentive, to 800 rupees ($14.70) from 500 rupees a megawatt-hour of electricity fed into the grid, Nigam said.

The subsidy was previously only available to the first 4,000 megawatts of completed wind projects. That will be expanded to allow as much as 15,000 megawatts of wind-farm capacity to claim the subsidy before March 31, 2018, Nigam said.

The proposal is expected to go to the cabinet for approval by the end of December, he said.

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To contact the editor responsible for this story: Reed Landberg at