The Budget 2023 will boost green development, according to the renewable sector.
Union Finance Minister Nirmala Sitharaman said during her Union Budget address on Wednesday that India was strongly committed to the ‘panchamrit’ and net-zero carbon emission by 2070 to usher in green industrial and economic transformation.
The Finance Minister also said that Prime Minister Narendra Modi has laid out a vision for “LiFE,” or Lifestyle for Environment, in order to spark a movement of environmentally responsible lifestyles. She said that the Union Budget continues to emphasise green development.
Here’s what industry executives and experts have to say about the sector’s measures in Budget 2023.
IEEFA South Asia Director Vibhuti Garg
The budget correctly focused on boosting economic development by increasing capital expenditure allocation by 33% to Rs 10 lakh crore. This will enable and direct private sector investment into critical infrastructure areas.
“We welcome Budget 2023-24 and the government’s commitment to promoting environmental sustainability, as stressed by Finance Minister Nirmala Sitharaman,” said Dr. Amitabh Saran, CEO and Founder of Altigreen.
The announcement that subsidies for electric vehicle batteries will be extended for another year, as well as the decision to extend the concessional duty on lithium-ion cells for batteries for another year, is helpful; however, we expect the government to extend these for three years to provide a stable policy environment for the industry.”
Madhav Pai, WRI India’s Interim CEO and Programme Executive Director for Sustainable Cities and Transportation
“The inclusion of green growth as a budget priority, as evidenced by allocations for energy transition, a focus on battery storage, and the announcement of green credits, provides encouragement for the environmental sector.”
The Urban Infrastructure Fund is a positive step that has the potential to help to the resilience of our cities, while the agricultural accelerator, focus on millets, and, most importantly, assistance for MSMEs guarantee a smooth transition.
We have yet to see how some of this will play out, notably the green credit initiative, but we are on the right track.”
CEO of the National Solar Energy Federation of India, Subrahmanyam Pulipaka
“NSEFI welcomes the Government of India Budget 2023, which includes seven priority areas, one of which is green growth.” Overall, NSEFI appreciates the government’s Green Growth-focused budget strategy, which will not only help us achieve our climate objectives and ambitions, but will also make India home to one of the world’s biggest Energy Transition programmes.
We think that the measures in this budget would assist speed India’s transformation to green energy, green transportation, green fuels, and green employment.”
Balasubramanian Viswanathan, IISD Policy Advisor
“As the government’s final full budget before national elections in 2024 and as India prepares to assume the G20 presidency, today’s speech consolidated the government’s position on energy and climate.”
Green growth is clearly identified as one of the cornerstones of development, with the government outlining assistance measures for storage and renewable energy evacuation infrastructure. This is a positive step forward as India attempts to significantly boost the percentage of renewables in the grid.
The finance minister also offered INR 35,000 crore in support of net zero and energy transition goals, while the specifics of the proposal remain unknown. An examination of the petroleum ministry budget revealed INR 30,000 crore in capital assistance for oil-marketing companies (OMCs) and INR 5,000 crore in strategic petroleum reserves.
While it is vital to regulate energy costs and maintain energy security, India must also ensure that financial assistance is channelled towards low-carbon technology.”
Saransh Bajpai, Senior Manager, Climate Programme, World Resources Institute India
“A credit guarantee for MSMEs through a revamped scheme that will go into effect on April 1, 2023, with a capital infusion of Rs. 9000 cr is a welcome step.”
Credit growth to the MSME sector has been extraordinarily strong, averaging more than 30.6% from January to November 2022, thanks to the extended Emergency Credit Linked Guarantee Scheme (ECLGS).
Furthermore, public sector banks’ improved financial condition has better positioned them to enhance lending availability.
This gives MSMEs the option to diversify their operations and generate additional employment. The fact that employment has been expanding quicker (at a rate of 13.7% in FY17 and FY20) in factories employing more than 100 workers compared to smaller factories employing fewer than 50 employees (at a pace of 4.6% in FY17 and FY20) demonstrates the scaling up of manufacturing units.”
Martand Shardul, Policy Director, Global Wind Energy Council (GWEC).
“The budget presented by the Hon’ble Union Finance Minister has designated green growth as one of the seven themes of the union budget 2023-2024,” says Martand Shardul, Policy Director, Global Wind Energy Council (GWEC).
It has prioritised ecosystem development for green hydrogen, infrastructure strengthening for utility-scale renewable energy generation, and storage solutions.
With this budget, India is rallying support for an integrated package of green energy solutions that will support supply-side reforms while also increasing demand for clean energy.
The drive for green hydrogen in the union budget
must result in a significant increase in utility-scale power production capacity from solar, wind, and hybrid projects.
Renewable energy accounts for more than half of the cost of green hydrogen, and future reductions in clean electricity would benefit the burgeoning green hydrogen economy. Co-location of renewable energy generation and green hydrogen production might reduce expenses even more.
The union budget for 2023-2024 aims
to expedite the creation of an environment favourable to green development. The budget provisions seek to create more clean and sustainable energy employment while also catalysing climate action.
India is taking significant steps to boost its position in the global supply chain by creating standards in renewable energy technologies. The nation is one of the world’s few centres that feed the worldwide wind supply chain.
The union budget targets for a faster clean energy transition and MSME sector development must likewise benefit and support the thousands of wind sector MSMEs.”
Climate
WRI’s Climate Programme Director, Ulka Kelkar
“Three types of measures will be required for the budget allocation of Rs 35000 crores (or about $4 billion) to begin catalysing the nearly $30 billion of energy transition finance required annually by India for its net zero future:
Risk guarantees to reduce the cost of capital for low-carbon investments in the country; demand aggregation measures, as has been done for LED lighting and electric buses; and viability gap financing for hydrogen electrolysers and offshore wind farms.”
The inclusion of pumped hydro as an energy storage option is opportune. Rooftop solar PV requires the least amount of land and generates the most employment per MW of renewable energy; targeted assistance and creative business models may help it reach its full potential.”
Anjal Prakash, Bharti Institute of Public Policy, Indian School of Business Research Director
“The costs of environmental issues or climate disasters are not factored into India’s GDP calculation.” The value of all products and services generated during the reporting quarter of the year is commonly used to compute GDP.
Climate catastrophes such as floods, cyclones, and droughts have had a substantial influence on the Indian economy in recent years, although their costs are often not included in GDP estimates.
It is commendable that the honourable finance minister’s green growth framework will lead investments in renewable energy, energy efficiency, and sustainable mobility.
However, we must identify and treat the regions of environmental deterioration and economic sectors where environmental degradation has the greatest effect. Unfortunately, the economic survey 2023 lacked sufficient analysis on this front to influence the green budget.”
WRI India Senior Manager, Climate Programme, Ashwini Hingne
“PAN as a common identifier for businesses, digilocker for document access, and risk-based KYC reforms can all be key enablers to simplify finance mobilisation for MSMEs.”
“Expansion of digital skilling through the launch of a unified scale and digital platform for enabling demand-based skilling, linking with employers including MSMEs, and facilitating access to entrepreneurship schemes are important for supporting job-ready youth.”
Namrata Ginoya, Senior Manager, Energy and Resilience, World Resources Institute India
“Outlays for horticulture, fisheries, and handicrafts are welcome, with a focus on value chain development through digital support, storage facilities, processing, FPOs, and co-ops.”
Energy integration in these outlays, as well as programmes that assist socioeconomic development of disadvantaged populations, may improve scheme efficacy and increase community resilience.”
“The 13GW RE plan for Ladakh is critical to India meeting its 500GW RE target this decade.” However, the deployment must be carried out carefully. Ladakh is a vulnerable environment that offers ecosystem services such as riverine water supplies.
The combination of technologies will determine the need for and technique for analysing environmental and social implications, as well as climatic threats to infrastructure.”
Apoorve Khandelwal is the Senior Programme Lead of the Council on Energy, Environment, and Water (CEEW).
“Three major announcements in the union budget shared by the finance minister have the potential to enable nutritional security, improve farmer livelihoods, and increase climate resilience.”
To begin, the announcement that the National Mission on Natural Farming will support 1 crore farmers over the next three years is a high-risk – high-reward bet that must be supplemented by a significantly increased focus on rigorous evidence generation through long-term comparative assessments.
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