Is the 2023 union budget truly a green budget ? What augurs for India, beyond the budget.

Finance minister of India Ms. Nirmala Sitharaman presented her 5th straight budget and possibly her last in this term of of the government on February the 1st ,2023 in the Lok Sabha or the lower house of the parliament. Experts and pundits have lauded her efforts and some have been critical.

So, what do we make of it. From our point of view , we need to ask, does the budget provide any meaningful impetus for India ( the world's third largest polluter), towards mitigation of climate change or green house gas emission. Will this help India meet its commitment towards the Paris agreement and its own NDC with the IPCCC .

To begin , the minister mentioned 'green growth' as a priority and used 'sustainability' and 'green' many a times in her budget speech. And there were a slew of announcements too. Clearly this is a departure from the past. We should keep in mind  India's G 20 presidency and the emphasis on climate change in that forum. Also the criticism from many quarters on India's slow pace towards their committed climate goals. So, was the finance minister serious about green growth in this budget? Were all the announcements made, truly reflective of a serious intent? let us examine them in some detail.

The big announcement was the enhancement of capital expenditure budget by 33% to 10 lakh crores or 1.25 trillion US dollars . The bulk of this is slated to be spent on infrastructure projects such as 50 additional airports, from identifying 100 projects to develop last-mile connectivity for sectors such as coal and ports. to railway infrastructure upgrades to public low cost housing under the 'PM Awas Yojna' and others.

Our high level observation are - with much construction in store in the coming years , comes more than ever before, anthropogenic ( human) activities - let us imagine runways ,buildings roads, tunnels , bridges being built all across the expanse of the country , mountains being cut , streams and water bodies being littered with debris , forest and trees being cut down , soil being disturbed , seemingly with no new safeguards in place and then habitations come in to swamp these developments . By any stretch , how can these be seen as environment friendly. While one may be right to argue that India does need a massive dose of infrastructure , the kind of infrastructure and the kind of progress that India requires ,is not being discussed or being alluded to in any public forum by successive governments.

Let us look at some recent examples .Over 50 hydroelectric projects are at various stages of readiness in the Himalayan region . Over thousand kilometers of roads have been built or improved upon in these mountainous terrains. Not only have these wreaked havoc in the last few years but there is grave danger of a human catastrophe of an unprecedented nature in the future too. Any large scale activities will spring up their own share of environmental concerns and this is anywhere in India. All we are saying is, pause and give it some thought. Even in terms of providing low cost housing for the poor , it would have been pertinent, if this had some environmental consideration - indigenous and eco friendly building material, rain water harvesting, composting , waste management etc. None is seen or heard , for the moment, at least.

Another major announcements the finance minister made was a capital investment of Rs 35,000 crore or 4.4 billion US dollars towards energy transition. She said this should help India towards a net zero future . As per the budget document , though, the funds would go to the Ministry of Petroleum and Natural Gas. Of this, Rs 30,000 crore will go to oil-marketing companies, and the remaining Rs 5,000 crores, will be spent on strategic petroleum reserves. . Clearly it is funding the fossil fuel driven industry - oil and gas , the main cause of emissions and resulting air pollution in the country . It remains to be seen if any of this goes for low carbon technologies in this sector . But how is this initiative a great one for net zero, one needs to ask .

The other big ticket announcements related to the environment , sustainability , agriculture, gainful employment and rural communities were as follows

-viability funding gap for battery energy storage system,

-20,700 crore outlay for inter-state transmission system for evacuation and grid integration of renewable energy from Ladakh,

-A green credit program to “encourage behavioral change” to be notified under the Environment (Protection) Act

-A scheme to promote alternative fertilizers .Centre to facilitate one crore farmers to adopt natural farming over the next three years. For this, 10,000 Bio-Input Resource Centre's to be set-up, creating a national-level distributed micro-fertilizer and pesticide manufacturing network.

-Atmanirbhar Clean Plant Program with an outlay of ₹2200 crore to be launched to boost availability of disease-free, quality planting material for high value horticultural crops.

-500 new ‘waste-to-wealth’ plants under the GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme to promote a circular economy. These will include 200 compressed biogas (CBG) plants, including 75 plants in urban areas, and 300 community or cluster-based plants at a total investment of Rs 10,000 crore.,

-Rs 19,700 crore for the National Green Hydrogen mission - a new project, ‘Mangrove Initiative for Shoreline Habitats & Tangible Incomes’ or MISHTI, which will involve planting mangroves along the coastline and on salt pan lands, wherever feasible, through convergence between MGNREGA, CAMPA Fund and other sources.

-Amrit Dharohar, another new scheme, will be implemented over the next three years to “encourage optimal use of wetlands, and enhance biodiversity, carbon stock, eco-tourism opportunities and income generation for local communities”.

-₹20 lakh crore agricultural credit targeted at animal husbandry, dairy and fisheries

-To make India a global hub for 'Shree Anna', the Indian Institute of Millet Research, Hyderabad will be supported as the Centre of Excellence for sharing best practices, research and technologies at the international level.

-A new sub-scheme of PM Matsya Sampada Yojana with targeted investment of ₹6,000 crore to be launched to further enable activities of fishermen, fish vendors, and micro & small enterprises, improve value chain efficiencies, and expand the market.

There were some innocuous ones , which lacked detail /was one off / seemed to lack intent , like ...

-A proposal to co-fire 5-7 per cent biomass pellets in thermal power plants, resulting in estimated carbon dioxide (CO2) reduction of 38 million tonnes annually; this will ideally provide an income to farmers and reduce stubble burning.

-Digital public infrastructure for agriculture to be built as an open source, open standard and inter operable public good to enable inclusive farmer centric solutions and support for growth of Agri-tech industry and start-ups.

-Computerization of 63,000 Primary Agricultural Credit Societies (PACS) with an investment of ₹2,516 crore initiated.

-Energy efficiency and savings promoted for large commercial buildings through the energy service company model, via capacity-building and awareness about energy audits

-Four pilot projects for coal gasification and conversion of coal into chemicals- focus on agroforestry and private forestry; support to farmers belonging to Scheduled Castes / Scheduled Tribes who want to take up agroforestry

-Sovereign green bonds to be issued in public sector projects to reduce carbon intensity of the economy

-Agriculture Accelerator Fund to be set-up to encourage Agri-startups by young entrepreneurs in rural areas.

-Massive decentralised storage capacity to be set up to help farmers store their produce and realize remunerative prices through sale at appropriate times.

There were some which could possibly be election largesse.

-In the drought-prone central region of Karnataka, central assistance of Rs 5,300 crore will be given to Upper Bhadra Project to provide sustainable micro irrigation and filling up of surface tanks for drinking water. The state is set to have an assembly election in the first half of this year.

We liked few schemes which spoke of institutionalizing skill development , education

-Pradhan Mantri Kaushal Vikas Yojana 4.0, to be launched to skill lakhs of youth within the next three years covering new age courses for Industry 4.0 like coding, AI, robotics, mechatronics, IOT, 3D printing, drones, and soft skills.

-30 Skill India International Centres to be set up across different States to skill youth for international opportunities.

-A National Digital Library for Children and Adolescents to be set-up for facilitating availability of quality books across geographies, languages, genres and levels, and device agnostic accessibility.

On the budgetary allocation for various schemes and ministries , there were some surprises.

The estimated expenditure for the Union Ministry of New and Renewable Energy, responsible for overseeing India’s ambitious renewable energy targets, has decreased marginally from Rs 7,681.80 crore to Rs 6,900.68 crore — the highest allocation is for grid-based solar power of around Rs 3,300 crore. On the flipside, public enterprises overseeing the mining of coal, such as Coal India Ltd, together saw a boost in resources from Rs 18,746 crore to Rs 21,420 crore. This is a true reflection of India consuming more coal in absolute terms in the years to come and our reliance on fossil fuel is on the increase.

The budget allocation for the Ministry of Environment, Forest and Climate Change increased from a revised estimate of Rs 2,478 crore in the last budget to Rs 3,079.4 crore this year.

A separate budget has been allocated for the National Mission on Natural Farming, at Rs 459 crore.

Also reflective of the government being clueless on the air quality front and relying heavily on EV's to decarbonize the transport sector are the following allocations

The budget for controlling air pollution increased from a revised estimate of Rs 600 crore last year to Rs 756 crore in the latest budget.

The Centre’s electric vehicle policy ‘Scheme for Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle in India’ saw a big boost from Rs 800 crore last year to Rs 2,908.28 crore.

The budget estimate for the Mahatma Gandhi National Rural Employment Guarantee Program, a scheme with great potential for climate resilience and carbon sequestration, has been revised downwards from Rs 98,000 crore last year to Rs 73,000 crore. This could impede rural income and job creation as agriculture is becoming unremunerative and rural unemployment especially amongst youth is increasing.

Few significant reductions/ exemptions in the import duty front for the sustainable sector were

- extension of customs duty exemption on the import of capital goods and equipment needed to produce lithium-ion cells for use in electric vehicle batteries .

- relaxation of duty on electrolyzer, an important component for manufacturing green hydrogen

On the burning question of liveability in Indian cities . the finance minister failed to address the increasing air pollution, ground water depletion and polluting of water bodies, except in this manner -

She says ,"States and cities will be encouraged to undertake urban planning reforms and actions to transform cities into ‘sustainable cities of tomorrow’." and adds “This means efficient use of land resources, adequate resources for urban infrastructure, transit-oriented development, enhanced availability and affordability of urban land, and opportunities for all."

To sum up , The green theme was built up in the text and rendition of the FM and not surprisingly by the pro government media This is perhaps for a reason but to be fair , there were some sound all-round initiatives towards renewables , natural farming ,electric vehicles, skill and community development . We are aware that much of the action is outside of these announcements and the government is seized of the matter ,but there are certainly, few misses in this document.

Experts have pointed out that there are no budgetary allocations for crucial projects such as the National Climate Change Action Plan, the National Adaptation Plan and the National Mission on Himalayan Studies. This comes at a time when Joshimath and several other towns in the state of Uttarakhand in the Himalaya are facing land displacement. In general ,we have seen that this government has a thing for starting a new scheme , when something of the same order is already in existence or simply rebadging the old and claiming at as a ' brand new initiative '. So perhaps, there is a case for continuity and simplification of program/ programs based on a long term vision.

We believe that India's biggest issues at the moment are air quality ,surface and ground water contamination on account of waste disposal and continual depletion of ground water. Indian cities are becoming unliveable, with its infrastructure woes ,deteriorating air quality, lack of drinking water and sanitation challenges,. There is an urgent need for greater thrusts under the National Urban Renewal Mission scheme which was first initiated in 2005.

This budget remains silent on the burning of agricultural waste , deteriorating air quality across an area as large as the northern gangetic plains and rapidly depleting ground water on account of its rampant diversion for agriculture, almost everywhere in the subcontinent. It does not have any firm initiatives on making cities a great place to live except to trust few plans from the past. Smaller  thrust areas / solution, such as solar rooftops , rain water harvesting, modernizing waste management and disposal have been ignored. There is a need to identify the areas of environmental degradation and areas of the economy where environmental degradation has the greatest impact and take steps to address them. The economic survey 2023 too, unfortunately, didn’t have enough analysis or vision to aid the finance minister in developing a framework.

On the social side in the budget document ,job creation is largely ignored. Perhaps it is left to accruals from higher capital infrastructure spend which is little far fetched. Even if more jobs are created through capex as it is laid out in the budget it happens at the lower strata - both skilled and unskilled variety. Educated youth coming into the job market are finding no takers and the budget is not talking about investments in higher education or creating higher paying employment. There is no pressure to speak of ,on the industry, to add more jobs or to even invest more . This is shocking ! Both Indian and foreign companies operating in india have reaped and are reaping rich benefits from government policies to accrue higher earnings and growth. But they seem quite happy to turn in profits without taking on any extra ounce of social responsibility.

On a broader front while the environmental and social aspects of a scheme or a project or a spend is subject to a measure , there is much to be said about the obfuscation of data and transparency on the governance side.

No major initiative at the apex level of a government world over ,has succeeded without a good dose of fine tuning and a fall back assessment .Much depends on tinkering, fine tuning , assessing a particular initiative to get it right . This could also be a necessity across regions , terrains and cultures in India. The biggest problem with the BJP led central government in India is that they are completely averse to feedback. Much of any advice, is construed as criticism . Second, is a feeling in the government that any tall initiative being brought about is too big to fail. In this quest for jumbo initiatives , and in the absence of facilitating cooperation from all parties , there comes a need for duplication ,falsification ,one-upmanship, hyperbole , jingoism and what not ! This keeps the public guessing as to the real result of any undertaking . This is hurting India - both its citizens and the natural resources at the country's disposal.

The growth in jobs and opportunities has not kept pace with the population growth for a while now. Aspirations set by the leaders has not manifested to the bottom half of the pyramid and perhaps even to the middle class.

As a country vulnerable to climate change and also under pressure to uplift 150 million people from poverty (people with income of $2, or Rs 160, per day or less in purchasing power parity), India’s Union Budget 2023-24 should ideally reflect government spending that expands the social safety net and plans for low-carbon, climate-resilient development both at the same time. Has this government and the Finance minister managed to achieve this objective .

We would think not .But they cannot be faulted, for not trying!