India’s Union Budget 2024-25 marks a significant stride towards sustainable development and climate resilience. This budget emphasises commitments to green energy, clean technologies, and climate-resilient agriculture, representing a notable leap forward. Here’s an in-depth analysis of the key highlights, new frameworks, climate targets, and how this budget stands out in terms of climate-related initiatives compared to previous years.
Policy Framework and Strategic Initiatives
A key highlight of this year’s budget is the development of a taxonomy for climate finance. According to the International Finance Corporation (IFC), India needs an estimated $10.1 trillion to achieve net-zero emissions by 2070. Public investments alone cannot meet this goal, necessitating standardised investment frameworks to attract both domestic and international capital. The budget introduces a carbon market and a comprehensive taxonomy for sustainable finance, crucial for guiding investments towards achieving the net-zero target. Additionally, the focus on critical minerals and dedicated rail corridors for their transportation underscores the importance of securing supply chains for the green economy, although more clarity on the roadmap is needed.
Renewable energy expansion
The PM Surya Ghar Muft Bijli Yojana, allocating Rs 6,250 crore for installing rooftop solar plants in 1 crore households, aims to provide free electricity up to 300 units per month. With 1.28 crore registrations already, this initiative is set to significantly boost renewable energy use and reduce fossil fuel dependence.
The budget also emphasises nuclear energy development, with plans to partner with the private sector for Bharat Small Reactors and Bharat Small Modular Reactors, alongside R&D for new nuclear technologies. The allocation for the National Green Hydrogen Mission has been increased to Rs 600 crore from Rs 100 crore, positioning India as a leader in green hydrogen production and supporting the global transition to clean energy.
Despite a reduction in the budget for the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, there is a strong emphasis on enhancing the EV ecosystem. This includes improved charging infrastructure and a payment security mechanism to facilitate the adoption of e-buses, along with developing battery storage capabilities under the Production-Linked Incentive (PLI) scheme.
Viability gap funding has been allocated for harnessing offshore wind energy, with an initial capacity target of 1 gigawatt, marking a pioneering step towards expanding India’s wind energy capacity beyond land-based projects.
Climate-Resilient Agriculture
The government plans to release 109 high-yielding, climate-resilient crop varieties and encourage one crore farmers to adopt natural farming practices, supported by certification and branding. This approach aims to promote sustainable agricultural practices that are less reliant on chemical inputs, thus reducing the environmental footprint of farming while enhancing agricultural productivity. Additionally, the introduction of a bio-manufacturing and bio-foundry scheme aims to promote environmentally friendly alternatives such as biodegradable polymers, bioplastics, and biopharmaceuticals. This initiative is part of a broader strategy to reduce reliance on traditional petroleum-based products and support sustainable manufacturing.
New climate targets
India has set ambitious climate targets for 2024 and beyond. As part of the Panchamrit pledge at COP26, India aims to achieve 500 GW of renewable energy by 2030, meet half of its energy requirements from renewables, reduce 1 billion metric tonnes of carbon emissions, reduce carbon intensity by 45 per cent by 2030, and achieve net zero by 2070.
Compared to previous years, the 2024-25 budget has seen a significant increase in the allocation for climate-related initiatives. For instance, the Ministry of New and Renewable Energy’s budget has seen a 25.71 per cent increase to Rs 128.5 billion. This is a clear indication of the government’s commitment to promoting renewable energy and transitioning to a sustainable energy future.
Conclusion
India’s Union Budget 2024-25 lays a robust foundation for sustainable development and climate action, with strategic investments in green energy, sustainable agriculture, and climate resilience. By aligning budgetary allocations with long-term environmental goals, the government is paving the way for a more sustainable and resilient India. The emphasis on green growth, clean energy, and climate resilience marks a significant evolution from previous budgets, reflecting India’s growing commitment to combating climate change and promoting sustainable development.
These initiatives and frameworks not only reflect India’s commitment to its international climate obligations but also demonstrate a comprehensive strategy to integrate sustainability into its economic development plans.
Dr Anil Agrawal, ex-Member of Parliament, Rajya Sabha; Anand Kumar, Lecturer Finance, DCU Business School, Dublin City University; Avinash Kumar, Executive Director, Earthood. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect News18’s views.
Comments
0 comment