Explained | What does ‘Green Growth’, termed as one of the ‘Saptarishis’ of India’s Union Budget 2023, consist of?

In a welcome move, sectors like green energy, green mobility, green buildings, green farming, and green credits featured prominently in India’s Finance Minister, Nirmala Sitharaman’s Union Budget 2023-24 on 1st February. Sitharaman stated that this budget focuses on ‘green growth’ and it is one of the seven goals or saptarishis in this “first budget of the Amrit Kal’’. An amount of Rs 3079.40 crore has been allocated to the Ministry of Environment, Forest and Climate Change (MoEFCC) as part of the Union Budget 2023.

Green growth is one of the seven priorities of saptarishis to guide India into Amrit Kaal, as per Sitaraman. The Prime Minister’s vision of Lifestyle for Environment, or  “LiFE” will work in moving the country toward an “environmentally conscious lifestyle”, she said. India is moving forward firmly for panchamrit and a country with net-zero carbon emission by 2070 to usher in green industrial and economic transition.

What is the green credit program?

The Finance Minister announced certain measures for climate action in the budget. The Green Credit program to “encourage behavioral change” will be notified under the Environment (Protection) Act, she said. Green credit schemes allow “forests” to be traded as a commodity. This allows the Forest Department to outsource one of its responsibilities of reforesting to non-government agencies.

This will incentivize environmentally sustainable and responsive actions by private companies, individuals, and local bodies (both urban and rural). The green credit program aims to incentivize and mobilize additional resources for environmentally sustainable and responsive actions. It will help achieve international commitments such as sustainable development goals (SDGs) and nationally determined contributions under the Green India Mission launched in 2014.

Focus areas of Union Budget 2023 to achieve green growth:

1. Green sources of energy: The previous year’s focus on energy transition and climate action was carried forward as the center of this year’s Budget. It is particularly significant with India’s G20 presidency and keeping in line with India’s positioning as a global leader in climate action, and its leadership position representing the developing world at various international negotiations including the Conference of Parties. Moreover, Rs 35,000 crore outlay for energy security, energy transition, and net zero targets has also been announced. 

2. Waste to wealth: 500 new ‘waste to wealth’ plants announced under GOBARdhan (Galvanizing Organic Bio Agro Resources Dhan) scheme to be established. These plants aim to promote a circular economy at a total investment of Rs 10,000 crore, out of which a 5 percent compressed biogas mandate to be introduced for all organizations marketing natural and biogas and annual production of 5 MMT under the Green Hydrogen Mission by 2030 to reduce dependence on fossil fuel imports.

3. Promotion of alternate fertilizers: The finance minister has further announced the “PM Programme for Restoration, Awareness, Nourishment, and Amelioration of Mother Earth” (PM-PRANAM) to incentivize States and UTs to promote alternative fertilizers and balanced use of chemical fertilizers.

4. Enhancing Mangrove ecosystem: The Amrit Dharohar scheme is to be implemented over the next three years to encourage optimal use of wetlands, strengthen biodiversity, carbon stock, eco-tourism opportunities, and income generation for local communities. Sitharaman has also announced the ‘Mangrove Initiative for Shoreline Habitats and Tangible Incomes’ (MISHTI) for mangrove plantations along the coastline and on saltpan lands.

5. Air Quality: In keeping with the Centre’s attention to improving air quality, the allocation for the National Clean Air Programme has been increased to Rs 756 crore, from Rs 600 crore last year. It is also announced that replacing old polluting vehicles is an essential part of greening the economy. Adequate funds would be allocated to scrap old cars, especially for the Central and state governments and ambulances.

6. Natural Farming: The Centre is to facilitate one crore farmers to adopt natural farming over the next three years, for which 10,000 bio-input resource centers. Bhartiya Prakritik Kheti Bio-Input Resource Centres will be set up to aid one crore farmers across the country to adopt natural farming. Natural Farming is a chemical-free traditional farming method. It reduces dependency on purchased inputs and will help to ease smallholder farmers’ credit burden.

7. Coastal Shipping: Coastal shipping will be promoted as a significant energy-efficient and low-cost mode of transportation, both for passengers and freight, through PPP mode with viability gap funding.

What are the challenges to green growth?

• An important task for government policy focusing on green growth is to set the appropriate “framework conditions” for the functioning. There needs to be a proper legal framework to ensure transparency.  
• Private investors may often have weak incentives to pursue investments in long-term technological development. 
• “This is definitely an ambitious green growth budget. What is disappointing is that there is no institutional structure in place to ensure the implementation of climate action. Measures to reduce carbon intensity have been announced across sectors and ministries but there is no nodal agency in place to monitor the spending and climate action,’’ said IPCC author Dr. Anjal Prakash.

Important programs left in the lurch?

Numerous important programs, including the National Mission on Himalayan Studies, the National Adaptation Fund, and the Climate Change Action Plan, did not receive funding in this year’s budget. These programs each received Rs 30 crore, Rs 60 crore, and Rs 48 crore in last year’s budget. 

The National Mission on Himalayan Studies is struggling financially at a time when land displacement is a major worry in Himalayan hill towns like Joshimath. 

The Climate Resilient Agriculture Initiative, a federal sector program run by the Ministry of Agriculture and Farmers’ Welfare, has not received any funding in this budget despite receiving Rs 40 crore in the previous fiscal year.