In Short : The Union Budget 2024-25 aims to chart a course for sustainable growth by prioritizing investments in renewable energy, green infrastructure, and climate resilience. These measures are designed to foster long-term economic stability while addressing environmental challenges and promoting sustainable development.
In Detail : The Government of India is working towards its vision of “Viksit Bharat” by 2047, which encompasses economic development, environmental sustainability, good governance and social progress. The upcoming budget, scheduled to be presented by Finance Minister Nirmala Sitharaman on 23 July 2024, aims to advance this vision.
The interim budget has set a strong foundation by emphasising renewable energy and green initiatives. Building on progress, the upcoming budget will further solidify India’s commitment with significant investments. It proposes a 25.71 percent increase in the Ministry of New and Renewable Energy’s budget to ₹128.5 billion and enhanced funding for solar power projects and the National Green Hydrogen Mission. These initiatives are essential to address climate change, achieve the net-zero emissions target by 2070 and ensure long-term prosperity for citizens.
Prioritising renewables
The overall budget allocation for the Ministry of New and Renewable Energy (MNRE) to enhance the solar power grid has increased from ₹4,970 crore in FY2023–24 to ₹8,500 crore in FY2024–25, ensuring a robust framework to adopt solar energy across the country. This investment aims to support India’s growing renewable energy needs and reduce dependence on fossil fuels.
The “Pradhan Mantri Suryodaya Yojna” is a significant policy initiative that aims to decentralise solar energy use. This programme targets installing solar panels on one crore houses, delivering transformative benefits. Households will gain access to clean, reliable energy and are anticipated to receive 300 units of free electricity per month.
The large-scale rollout of solar panels is expected to generate substantial job opportunities across various sectors. These include installation, maintenance and related services, which are environmentally conducive to entrepreneurial activity and will contribute to broader economic growth and diversification.
Adopting biofuels, a sustainable alternative
The interim budget announced earlier set the stage for significant advancements in biofuels, particularly through the phased blending of Compressed Biogas (CBG) in vehicles and households. This initiative aimed to establish 750 CBG projects by 2028–29 with an investment potential of ₹37,500 crore. Additionally, it introduced a biomass collection financial assistance scheme, allocating ₹564.75 crore until FY2026–27, to support biogas producers by facilitating the procurement of biomass aggregation machinery.
Continued support for biofuels is anticipated in the upcoming budget, with expectations to expand the phased blending of CBG in vehicles and households. This includes further increasing the number of CBG projects and enhancing investments to accelerate organic waste recycling. Such measures are crucial in reducing reliance on traditional fossil fuels and advancing India’s sustainable energy goals.
Introducing greener transportation
A significant portion of the budget is allocated to develop a robust Electric Vehicle (EV) ecosystem, aiming for an ambitious 30 percent EV sales penetration by 2030. However, the current charging network remains inadequate, raising concerns among potential EV buyers. India’s plan for clean transportation is supported by the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) programme.
FAME’s first two phases (FAME I and FAME II) have been building the infrastructure needed to get more EVs on the road. With the upgraded FAME III scheme, financial incentives are anticipated for encouraging the adoption of electric two- and three-wheelers as well as government-owned buses. Expectations are high for increased funding in the upcoming budget to address the current gaps in charging stations, ensuring seamless adoption of EVs nationwide. Additionally, discussions point towards further incentives under FAME III to accelerate the deployment of EVs, including private and public transport options.
Boosting research and innovation
Recognising the importance of research and innovation in driving sustainable development, the government aims to increase R&D spending to 2 percent of GDP from the current 0.7 percent. The proposed budget includes a corpus of ₹1 trillion to provide long-term financing through 50-year interest-free loans, especially in sunrise sectors, such as green fuel, green farming and green mobility. Encouraging private sector investment in research and innovation can result in the adoption of clean energy technologies and green processes, positioning India as a leader in global sustainability efforts.
We hope the Union Budget 2024–25 reflects a robust commitment to green infrastructure and sustainable development. This forward-thinking plan will help prioritise renewable energy, clean fuels, sustainable transportation and research, paving the way for a net-zero future by 2070. These investments will help go beyond environmental benefits. They hold the promise of economic boom and social progress, solidifying India’s position as a global sustainability leader and aligning with the overarching vision of “Viksit Bharat”.
