Union Budget 2024 to accelerate India’s transition to a climate-resilient economy

As the Union Finance Minister prepares to introduce the Union Budget 2024, there are great hopes that it would play a critical role in expediting India's transition to a low-carbon and climate resilient economy.


India is committed to reaching the Paris Agreement's renewable energy and carbon emission reduction targets, and the budget is viewed as a critical tool for catalyzing green investments, creating green jobs, and steering India towards a more sustainable future.

Boosting Renewable Energy Generation:
India wants to reach 500 GW of renewable energy capacity by 2030. While significant progress has been made, with over 170 GW projected by 2023, this increase must be accelerated. The Ministry of New and Renewable Energy believes that USD 500 billion in investments are required, with the private sector providing the majority of the funds. The budget can help by offering viability gap funds, low-cost financing through a designated green fund, and incentives such as tax breaks and exemptions on capital equipment imports.

Empowering MSMEs for the Green Transition:
Micro, small, and medium-sized firms (MSMEs) are vital to India's economy, yet many lack access to inexpensive financing and technical skills. The budget should include targeted incentives, such as interest subsidies and capacity-building programs, to encourage MSMEs to adopt cleaner, more energy-efficient technologies. Using low-carbon and resource-efficient methods would become more common in industrial hubs because of this.

Scaling up electric mobility:
By 2030, India expects to have a considerable share of electric vehicles (EVs) in its transportation industry. The budget may help with this transformation by learning from worldwide peers, giving government funding for charging stations, providing non-monetary benefits to EV drivers, and creating an atmosphere suitable for EV adoption.

Promoting Shipping and Ports:
Allocations for port infrastructure and shipping require attention, especially in light of India's 'Blue Economy' goal. Efforts should be made to enhance logistics ports, utilizing coastal ships and inland waterways to reduce logistics costs and carbon emissions.

Building Climate-Resilient Digital Agriculture:
Climate change poses issues for India's agriculture sector, which employs almost half of the country's workers. Digital agriculture and better management practices have the potential to reduce climate concerns while also improving food security. The budget should prioritize concrete initiatives to increase the usage of digital technology in agriculture.

Summing up:
While the budget provides an opportunity to introduce new schemes and revisit old ones, it should also provide a multi-year plan that includes incentives, sectoral policies, and public spending plans to provide long-term guidance for green adoption. Consistent political will is essential for effective implementation while acknowledging that not everything can be accomplished in a single budget cycle. Policymakers should evaluate existing systems, undertake cost-benefit evaluations, and consider the long-term repercussions of their actions.