Climate Change: How Budget 2024 is a ‘landmark in India’s journey to net-zero economy’

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Indian Finance Minister Nirmala Sitharaman said during her Budget 2024 speech that India will solarise rooftops of 10 million households and provide viability gap funding for harnessing offshore wind energy potential with an initial capacity of one gigawatt in an effort to achieve net-zero carbon emissions. 

Sitharaman said that the government will mandate the phased blending of compressed biogas (CBG) in compressed natural gas (CNG) for transport and natural gas (PNG) for domestic purposes. 

India has pledged to achieve net-zero emissions by 2070 and 50 per cent cumulative electric power installed capacity from non-fossil fuel-based energy sources by 2030. 

The Indian finance minister stated that the government would enable 10 million homes to get up to 300 units of free electricity each month through the rooftop solar initiative which will result in savings of up to Rs 18,000 annually for households from selling the surplus solar electricity to distribution companies. 

The International Renewable Energy Agency’s Renewable Capacity Statistics 2023 noted that globally, India stands fourth in renewable energy installed capacity, fourth in wind power capacity and fifth in solar power capacity. 

Saurabh Kumar, who is the Vice President – India, Global Energy Alliance for People and Planet (GEAPP), said: “The interim Union Budget 2024 not only signifies a landmark in India’s journey to a net-zero economy by 2070 but reflects the government’s vision of Viksit Bharat, which anchors on pillars of energy security and accessible, affordable clean energy.” 

“The rooftop solar scheme marks a significant milestone for scaling up India’s clean energy ambitions. The push for an Electric Vehicle (EV) ecosystem creation and the large-scale roll-out of E-buses through payment security mechanisms will decarbonise the mobility sector while propelling India as a potential EV manufacturing hub. The announcement of the INR 1 lakh crore corpus is a remarkable step to attract private investment in innovation, research and development in the clean energy sector,” Kumar added. 

What is Blue Economy 2.0? 

Sitharaman also unveiled plans for the launch of Blue Economy 2.0, which is focused at promoting climate-resilient activities and sustainable development in coastal areas. 

The scheme will prioritise restoration and adaptation measures, as well as the expansion of coastal aquaculture and mariculture while using an integrated and multi-sectoral approach. 

Shailly Kedia, who is a Senior Fellow, at TERI and Curator of the World Sustainable Development Summit, said: “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.” 

While weighing in on the options on how to go about further in the future, Kedia said, “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 for FY 2024-25. The expanding mandate for the environment and climate change in India also needs to be reflected through an increase in allocation to the MOEFCC.” 

“Statement 12 and Statement 13 in the Union Budget are on Gender Budget and Child Budgeting respectively. To give further impetus to 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,” he added. 

Moody’s on India’s Interim Budget 2024 

Moody’s Investors Service on Thursday said the interim budget for 2024-25 firmly conveys the government’s commitment to its fiscal consolidation goals, set against a backdrop of healthy economic growth. 

Moody’s Investors Service Senior Vice President Christian de Guzman said the government demonstrated fiscal restraint in not resorting to large handouts or increasing discretionary spending ahead of this year’s elections. 

“The government anticipates that reduced spending as a percentage of GDP will largely drive the reduction in the fiscal deficit, despite ongoing increases in planned infrastructure spending,” Guzman said. 

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