Experts want Centre to set aside 'green expenditure' funds in Union Budget 2022

Ahead of the upcoming Union Budget, environmental experts on Monday called for budgetary allocation under green expenditure to show that India is serious about meeting the enhanced targets announced by Prime Minister Narendra Modi at Conference of the Parties 26 in Glasgow. 

They also said that India's climate targets will require an investment of about USD 35 million in energy storage in this decade alone.

The Budget for the fiscal year commencing April 1, 2022, will be presented on Tuesday by Finance Minister Nirmala Sitharaman. 

The Union Budget can be the opportunity to bring focus and direction by announcing a green expenditure head in the Budget this time. 

Public expenditure allocations can intersect with a range of programmes across sectors, some of which could be tagged as green' and it will signal that the Indian government is serious about upping its game to meet the enhanced commitment announcements made by the Prime Minister in Glasgow, said Dhruba Purkayastha, India director, Climate Policy Initiative.

Talking about India's ambition to increase non-fossil electricity capacity to 500 giga watt in just nine years, another expert said that budget incentives are needed to fulfil the goals.  

India's climate targets will require about USD 35 billion investment in energy storage in this decade alone. Budget incentives and risk guarantees to attract investment in battery storage will be key to ramp up non-fossil electricity generation. 

India's climate targets aim to increase non-fossil electricity capacity from 158 GW to 500 GW in just nine years. Since land is precious, we need budget incentives to realise the full potential of rooftop solar photo voltaic (system), said Ulka Kelkar, director, Climate program, World Resources Institute (WRI) India.

Kelkar said that since critical mineral reserves are scarce, the budget can provide incentives for circular economy, urban mining and e-waste recycling. 

It would be great to see the creation of a national transition fund for fossil fuel sector workers and MSMEs, which can also attract grants from international climate funds, she said. 

Another expert said that the government should focus on developing long-term climate resilience and adaptation pathways for which the Budget must set aside substantial funds.

Recent cyclones like Yass, Tauktae and the 2021 Chennai floods are reminders that the government should focus on developing a long-term climate resilience and adaptation pathway for India. 

Budget 2022-23 must set aside substantial resources to support resilience activities at the local level, especially in augmenting nature-based solutions, building ground level capacities, and working through state and local governments, said A Nambi Appadurai, director, Climate Resilience Practice Program, WRI India.

He added that such investments would have multiple and long-term benefits for India's climate commitments, the people, their livelihoods, and the country's GDP as well.

Experts also called for budgetary allocation for 'green hydrogen' citing its importance in the industrial sector and in research and development to help indigenise green hydrogen production and use as an industrial fuel.

Green hydrogen has many industrial uses and can potentially decarbonise many hard-to-abate sectors, like the iron and steel industry. 

An outlay of Rs 1,200 crore by 2024 in the upcoming Budget could trigger pilots in various end-use applications such as testing green hydrogen readiness of natural gas pipelines, underground hydrogen storage, and pilots for equipment such as furnaces, boilers, and process heaters, said Hemant Mallya, senior programme lead, Council on Energy, Environment and Water (CEEW).

Mallya also called for another Rs 165 crore to support research and development, especially on catalysts and electrolyser membranes, finding substitutes for critical minerals, setting up testing labs and enforcing safety standards. 

These investments would help indigenise green hydrogen production and use it as an industrial fuel, he said.

With maximum applied fertiliser leaking into the air and water, causing pollution, another expert urged the government to provide direct income support to farmers in the upcoming Budget instead of the fertiliser subsidy. 

Our fiscal outlay on fertiliser subsidy is touching Rs 1,55,000 crore, with more than 78 per cent of the applied fertiliser leaking into our air and water, causing pollution. Instead, the government should consider providing direct income support to the farmers in a budget-neutral approach. 

Rs 1,55,000 crore can provide income support of more than Rs 11,000 per hectare of net sown area in the country. Such support, structured equitably across different classes of farmers, would not only be administratively more efficient, but would encourage more judicious use of fertilisers, creating a win-win for the government and the farmers while saving the environment, said Abhishek Jain, fellow and director, Powering Livelihoods, CEEW. 

During the COP 26 summit last year, Modi had made five commitments from India to the world. These included a promise to get 50 per cent of the country's energy from renewable resources by 2030 and to reduce the total projected carbon emissions by one billion tonnes by the same year.

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