Analysing the Interim Budget's Impact on Environment, Energy, and Resilience

February 1, 2024
Budget 2024-25

New Delhi, February 01, 2024: In the wake of the latest budget announcement, experts from The Energy and Resources Institute (TERI) have analysed the fiscal policies and financial allocations to provide insightful perspectives on their areas of expertise. TERI, renowned for its expertise in sustainable development and environmental research, the experts shed light on the potential implications of the budget on India's journey towards a greener and more resilient future.

Expressing her point of view on the interim budget, Dr Vibha Dhawan, Director General, TERI, said, “Given the slow pace of rooftop solarization in the country, the renewed thrust to accelerate the same with a host of incentives will add momentum and result in faster adoption of solar rooftops in the country.” She further added, “The thrust to accelerate use of Nano DAP might be game changer in better crop growth and yield, reduced environmental burden and increased farmer profitability. This enhances the scope for similar thrust to other nano-fertilizers which have tremendous benefits for GHG emissions reduction.”

Sharing his perspective, Ambassador Ajai Malhotra, Distinguished Fellow, Climate Change, TERI, said, “The Interim Budget 2024 reflects additional steps that India would be taking towards meeting its goal of net zero carbon emissions by 2070, while enhancing the proportion of renewable energy in its energy mix. Thus, 100 MT of coal gasification and liquefaction capacity would be installed by 2030, rooftop solar would get a boost, while blending of compressed biogas in CNG would be undertaken for transport and piped natural gas in a phased manner. A noteworthy new scheme of bio-manufacturing and bio-foundry would be launched shortly. What is particularly welcome is the confirmation that viability gap funding would be made available to harness offshore wind energy up to an initial capacity of 1 GW. These measures would burnish India’s credentials as a country seriously pursuing green growth as it develops.”

“It is heartening to note that the Government's efforts to increase capacity on important rail corridors, energy, mineral and cement has got a renewed thrust. For last ten years, the Government has made massive investments in capacity augmentation and electrification of railways. This is a welcome step in the right direction as carriage of freight and passenger traffic by railways greatly helps in mitigation of carbon emission as compared to road and air,” shared Mr Shri Prakash, Distinguished Fellow, Transport and Urban Governance, TERI.

Sharing his thoughts, particularly on water sector, Dr SK Sarkar, Distinguished Fellow, Natural Resource and Climate, TERI, said, “The proceedings only made a reference to water sector by mentioning ‘Har Ghar Jal’ program while talking about government measures for inclusive development and growth. This scheme of Jal Jeevan Mission is mandated to achieving water tap connections and water accessibility to 19.26 crore rural households by 2024: the program achieved 73% success by now, and 100% success achieved in states such as HY, Telangana, GJ, PJ, HP. The budget talks about Nari Shakti especially increased participation of women work force and people centric inclusive development by building consensus with states. This Har Ghar Jal program achieved these objectives. The budget talks of boosting farmers’ income but did not talk about increasing water use efficiency in agriculture sector. The WUE in agriculture sector is very low about 40 percent output per unit of water use. The budget stipulates that reforms are needed in states and INR 75000 CR interest free loan provided in the budget for linking reforms in the states. This concept should be made applicable for water sector reforms in the states.”

Ms Suruchi Bhadwal, Director, Earth Science and Climate Change, TERI, shared her opinion on varied aspects of the interim budget presented. “The Interim budget presented by the Hon’ble FM continues to highlight the importance of many programmes already being implemented by the Centre that seek to promote green growth and its integration into India’s overall development strategy. This includes the focus on promoting the uptake of clean energy, promoting the development of sustainable infrastructure, sustainable mobility and sustainable resource use practices. The immense contributions each of these sectors make towards reducing carbon footprints was highlighted. She highlighted alignment with the Panchamrit goals contributing to India’s net-zero goals by ushering in green industrial and economic transition with a focus on energy security. The range of actions are spread from focus on waste to wealth, to alternative fertilisers, to mangrove plantations to wetlands to launch of the Green Credit Program in the country.” Sharing her views on Green Hydrogen, she said, “Significant contributions towards the Green Hydrogen Mission and its scaling up is being planned. Allocations have been announced for the MoPNG for boosting capital investments for energy transitions and net zero objectives thereby promoting energy security. She also mentioned enhancing grid integration from renewables as well as allocated defined resources for enhancing battery storage and filling the VGF. 500 new plants have been proposed under the Gobardhan scheme.” She also added, “Focus on natural farming, alternative fertilisers will provide huge benefits in reducing carbon emissions. Promoting inclusive and sustainable development will ensure capacitating the society for an effective in- turn response.”

Ms Shabnam Bassi, Director, Sustainable Buildings, TERI, remarked, “From the real estate perspective, the budget continues to support initiatives for economically weaker sections which also become populous announcements. Therefore, it is heartening to see continued emphasis on affordable housing initiatives to boost consumer confidence and sentiment in affordable housing schemes of the government by way of Pradhan Mantri Awas Yojana (PMAY) version 2 likely to be announced post the election. This would enhance employment generation & boost all around economic growth with ensuring ‘Housing for All’ covering a wider segment of the population.” She further added, “It is an opportunity for us at TERI and GRIHA to mainstream integration of sustainable construction practices and enhance thermal comforts in the upcoming initiatives.”

“The interim budget has many references to promoting investments, a conducive financial sector, infrastructure development, and bio-economy. A great deal of emphasis has been given to regulatory interventions. The overall imperative is towards energy security. From the perspective of India's position on climate change the direction of the budget is well aligned. Yet, one will have to wait and see how these changes will help the unfolding of an ecosystem for climate-resilient development. Since this is an interim budget, it is difficult to say anything about the adequacy of resources being made available for climate action. However, given the overall resource requirements for a just and low-carbon transition, it can be reasonably said that the availability of public resources would fall short,” said Dr Manish Kumar Shrivastava, Associate Director, Earth Science and Climate Change, TERI.

Dr Shailly Kedia, Curator, WSDS, and Senior Fellow, TERI’s view on the interim budget, “The government has continued to expand the mandate for green growth. It is encouraging to see allocations and green initiatives such as bio-manufacturing, bio-foundry, climate resilient blue economy, electric mobility and focus on clean energy including offshore wind energy. According to Demand No. 28, budget estimates for Ministry of Environment, Forests and Climate Change (MoEFCC) are INR 3265 crores. This is less than 0.07% of the total expenditure FY 2024-25. The expanding mandate for environment and climate change in India also needs to be reflected through increase in allocation the MOEFCC. Statement 12 and Statement 13 in the Union Budget are on Gender Budget and Child Budgeting respectively. To give further impetus on environmental goals and equity, Union budgeting should include Green Budgeting as the third pillar of issue-based budgeting processes. If not a dedicated statement, a green tagging process as stated in the Union Budget 2020-21 should start.”

Sharing his thoughts on various aspects of the interim budget, Mr Souvik Bhattacharjya, Associate Director, Resource Efficiency and Governance, TERI, said, “The huge bioeconomy offers unprecedented opportunities in supporting circularity through generation of energy and by-products. CBG introduction will help in promoting sustainable and affordable mobility particularly in rural areas. However, many of the existing schemes to increase biogas production have not been successful. While it is encouraging to have blending of compressed biogas (CBG) in compressed natural gas (CNG) for transport (and piped natural gas (PNG)), there is need to leverage the existing learnings to ensure faster adoption of the sustainable fuel.”. He added, “The interim budget talks about scaling up alternate and sustainable materials including biodegradable polymers, bio-plastics, bio-pharmaceuticals and bio-agri-inputs. The challenge of these products would be the continued competition from fossil-based products. This calls for market creation of alternatives (possibly by mandating part of brands sourcing).” He also said, “The Blue Economy 2.0 requires better clarity of the interventions and timelines for meeting the objectives.”

Dr Nupur Bahadur, Associate Director, Environment & Waste Management, TERI said, “During the release of the interim budget speech, Finance Minister touched upon the water sector briefly and offered a glimpse of the significant outcomes of government initiatives, notably highlighting the success of programs like Har Ghar Jal. Additionally, the recently launched Aspirational Blocks Programme, which encompasses 500 blocks with water resources as a primary focus, was spotlighted among several domains. The Union government has allocated INR 70,163 crore for the Jal Jeevan Mission (JJM) in the budget 2024-25. The Interim Budget 2024-25 has put considerable importance on 'Blue Economy' which refers to the economic endeavours linked to oceans and seas with emphasis on signalling support for the marine ecosystem against looming threats posed by climate change, pollution, and over exploitation. Implementation of Pradhan Mantri Matsaya Sampada Yojana will be stepped up to enhance aquaculture productivity, double exports and generate more employment opportunities.

Climate finance
Climate change
Sustainable development