Sustainability High On The Agenda Of Budget 2022

Union Budget 2022-23 is encouraging for those looking towards a stronger sustainability thrust in the Government of India’s agenda. The finance minister, Nirmala Sitharaman, mentioned energy transition and climate action about six times while presenting her budget. Taking from Prime Minister Narendra Modi’s speech at the Glasgow COP26 Summit she emphasized the environmental concepts of sustainable consumption and circular economy with her statement, "What is needed today is mindful and deliberated utilization instead of mindless destructive consumption."

Additionally, there were direct references to green jobs and water security, conservation, clean mobility and appropriate technology. This is heartening with the 2030 Agenda for Sustainable Development Goals implementation, but the challenge lies in how India can realize targets with the allocated expenditure this year and beyond.

We have in 2022, a “green budget” of sorts. To understand the sustainability thrust we need to also follow the global environmental debate that is today in some ways and, rightly so, tilted towards energy transition and climate action. No wonder, therefore, renewable energy is the focus of this year’s budget, and budget allocation in the environmental space is maximum for the transition to clean energy.

While in terms of budget, Rs 3,030 crores to the Ministry of Environment, Forests and Climate Change (MoEF&CC) is a marginal increase from last year’s amount of Rs 2,870 crore, the allocation of Rs 19,500 crores under the Production Linked Incentive (PLI) scheme to facilitate domestic manufacturing for achieving the 280 GW solar capacity target by 2030 may be considered as an investment in sustainable development. This not only reveals a strategy for energy transition but as the finance minister mentioned, “opens up a huge employment opportunity and will take the country on a sustainable path" The UNSDG framework along with and SDGs for energy and climate change also include Goal 8 on Decent Work and Economic Growth.

Sustainability has also been highlighted as an opportunity rather than a challenge. The “green economy’ has been referred to as a “sunrise economy” with a potential for job creation as has been the circular economy transition and the transition to appropriate technologies -- all of which are linked to employment opportunities.

The budget allocates expenditures for climate change action plans (Rs 30 crore), control of pollution (Rs 460 crore), integrated development of wildlife habitats and conservation of natural resources and ecosystems (Rs 185.77 crore). However, the expenditure allocated for “environment” is larger if one takes into consideration the allocation for energy transition, water security and low emissions mobility, which have also been given due importance. Clean drinking water is still a challenge as is the depletion of water resources. Therefore, it is heartening that the Department of Drinking Water and Sanitation’s share of the budget is Rs 67,221.12 crore. Additionally, the Ministry of Jal Shakti, the Department of Water Resources, River Development and Ganga Rejuvenation has received expenditure worth ₹18,967.88 crore.

While electric mobility is part of the solution, it is certainly not enough to achieve sustainable development or decarbonization. However, it is a major enabler to shift away from the dependency on fossil fuels. The allocation for e-mobility is expected to increase the use of electric vehicles through the creation of fossil fuel-free transportation zones and the proposed new policy for battery swapping. There is also an underlying wish for a shift in urban public transportation. Of course, one would have liked some investments in non-motorized transport and the rest of the avoid-shift-improve solutions, but we must acknowledge that globally, too, technology solutions are increasingly popular in sustainability strategy.

While the target of four pilot projects for coal gasification and conversion of coal into chemicals to enhance technical and financial viability may not be enough, it is a step in the right direction. The emphasis on the issuance of sovereign green bonds is expected to help reduce carbon intensity and set up government-backed funds for climate action.

However, a lot still needs to be done for climate action, which the finance minister termed as one of the fourth pillars of development. While there may be an aspiration level of sustainability that comes across in this year’s budget one can wish for more. However, one must say it does allocate in multiple areas that overlap at least 11 of the 17 UNSDGs, which is a good sign for the country’s sustainability community.

(The author is Director, CDP India)