Budget 2023-24: Creating An Enabling Ecosystem For Green Growth

Finance Minister Nirmala Sitharaman’s first budget of ‘Amrit Kaal’, which envisions Prime Minister Narendra Modi’s vision towards One Earth, One Family, One Future is in several ways a “last mile” budget as it aims to further strengthen connections with the masses and ensure their well-being. With its seven priorities or ‘Saptarishi’ for Amrit Kaal, the budget aims to lay the blueprint for India@100 with allocations and schemes for all sections of the society.

The budget has provided a strong impetus for creation of assets, including infrastructure, by hiking the capital investment outlay to Rs 10 lakh crore. Such substantial targeted spending by the government will have a multiplier impact on the economy, enhance growth potential, create jobs and attract private sector investments.

Significantly, the budget has prioritised Green Growth as part of Saptarshi during the Amrit Kaal to build a greener and more sustainable India. The budget has taken a leaf from Prime Minister Narendra Modi’s clarion call for LiFE or Lifestyle for Environment to spur a movement towards environmentally conscious lifestyle. The reduction in duties on lithium-ion batteries will help reduce prices for EVs and lead to greater adoption while Green Credit Programme will incentivise environmentally sustainable and responsive actions by companies, individuals and local bodies. These measures are expected to accelerate the country's transition to a low-carbon economy, lessen dependency on fossil fuels, and eventually lead to the goal of net zero by 2070.

If the world has to combat climate change and ensure we leave a greener and healthier planet for our children, India has to take lead. The budget has allocated a sizeable Rs 35,000 crore towards energy transition and net zero objectives. It has also specific announcements for both battery storage and pumped storage projects to address intermittent nature of renewable power and encourage hybrid renewable projects.

While the budget has proposed viability gap funding for Battery Energy Storage Systems with capacity of 4,000 MWH, it promises a detailed framework for Pumped Storage Projects. Cost effective solutions will ensure round the clock power supply from renewable resources and usher in stability for the grid. This will also encourage more players to set up renewable projects and help India reach the target of 500 GW of renewable energy by 2030.

The budgetary support of Rs 20,700 crore for inter-state transmission system towards evacuation and grid integration of 13 GW renewable energy from Ladakh is a welcome step. The northern most Union Territory is an ideal location for both solar and wind projects. A robust power evacuation system will spur investments in the region and also create green jobs. The budget, while capping states’ fiscal deficit at 3.5% of SGDP, has tied 0.5% of this deficit to power sector reforms. The financial health of state DISCOMs has been an area of concern and this incentive is likely to bring in reforms for state DISCOMs.

Overall, the FY24 budget is well-crafted and it provides a robust framework for priority areas with emphasis on Green Growth. After successfully tackling Covid-19, and global headwinds last year, India is certainly on a strong footing. With a combination of its soft skills, technological prowess, human and natural resources, India is now ready to emerge as Vishwa Guru, pivoted on the pillars of Amrit Kaal.  

(Amit Jain, Managing Director, ENGIE India)