Green momentum | The Financial Express

Green momentum

The Budget measures to promote environmental sustainability shows the govt means business

Green momentum
The Budget also reiterated India’s commitment to developing green hydrogen capacity, allocating Rs 19,744 crore to the Green Hydrogen Mission that aims to develop 5 million metric tonnes of capacity by 2030. (IE)

The FY 24 Budget has rightly made ‘green growth’ a compass for the economy as India aims to reduce the emission of its gross domestic product (GDP) by 45% by 2030 from the 2005 levels. In recent years, India has assumed the mantle of a climate-action leader, spelling out an ambitious renewables vision for the coming decades. The renewables thrust, in turn, makes grid stability seminal for the resilience of the energy systems. The power distribution sector has been demanding policies that would facilitate greater uptake of storage systems. Against this backdrop, the allocations made in the Budget for storage and grid infrastructure assume importance. The viability gap funding scheme for battery energy storage system (BESS) projects with a capacity of 4GWh will help push renewable adoption with grid integration in mind. Some experts, however, believe the 4GWh target robs the scheme of some of its attractiveness for private sector investment. That said, industry bodies expect the Solar Energy Corporation of India, NTPC, and state government agencies to build battery storage projects under the scheme. Similarly, the allocation of Rs 8,300 crore by the Centre towards a Rs 20,700 crore investment for evacuation and grid integration of 13GW of renewable power generated in Ladakh is a step towards realising the potential of one of the most solar-rich regions in the country.

The allocation of Rs 30,000 crore for oil marketing companies to develop energy transition projects is an acknowledgment of a future that will be fossil-fuel-free. From vehicle scrapping that will cover old polluting vehicles of the government (the Centre and the states) to customs duty exemption for capital goods and machinery for lithium-ion battery manufacture in the country, there is a definitive push towards cleaner transport, which, in turn, will boost the ‘green’ productivity of the economy.

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The Budget also reiterated India’s commitment to developing green hydrogen capacity, allocating Rs 19,744 crore to the Green Hydrogen Mission that aims to develop 5 million metric tonnes of capacity by 2030. Crucially, the Budget also acknowledged the role agriculture in the country will need to play in shaping a sustainable future—the sector is the largest user of land (50%) and water (80%) in the country. The focus on natural farming through PM-PRANAM and 10,000 bio-input centres, and on encouraging a farm-driven circular economy (with Rs 10,000 crore investments in waste-to-wealth plants, including compressed biogas plants) could help usher in a carbon-lite, environmentally-friendly agricultural regime in the country.

The government also did well to announce a green credit programme in the Budget to incentivise environmentally-responsible behaviour by individuals, companies and organisations. The focus on conservation, through the announcements relating to protection of mangrove cover and wetlands, signals an adaptation vision that incorporates India’s natural legacy.

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While the Budget struck the right note on many ‘green’ fronts, there is also much that it missed. More ambition on the production-linked incentive schemes for the green economy and larger VGF outlays, especially in storage where the costs are still prohibitive, were in order. Perhaps they took a backseat because of the limited fiscal space. Also, the homeopathic increase in the allocation for the ministry of environment, forests, and climate change over what was budgeted for FY23 translates into a de-growth in funding if inflation is considered.

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First published on: 04-02-2023 at 04:30 IST