Indian Economy News

Budget will not only ensure green growth but also generate green jobs: PM Modi

On Wednesday, Prime Minister Narendra Modi stated that the union budget for FY23 will not only assure green growth but also green job creation. He remarked that a large sector is waiting for green jobs, which is why many people have dubbed the budget a green budget, while speaking to Bharatiya Janata Party workers on Aatmanirbhar Arthvyavastha or self-reliant economy.

The theme of energy transition and climate action was repeated throughout the budget, with "Energy Transition and Climate Action" listed as one of the top priorities for the government.

On 1st February, Finance Minister Ms. Nirmala Sitharaman presented the Union Budget, which included a slew of statements defining India's climate change strategy. Carbon emission and intensity reduction efforts included the 'Battery Swapping Policy,' which promotes green mobility, the sale of sovereign green bonds, and a policy requiring coal-fired power plants to use biomass pellets as 5% of their fuel mix.  The budget also announced a move to public transportation in metropolitan areas, which will be accompanied by clean technology and specific mobility zones with a zero-fossil-fuel policy, allowing only emission-free vehicles in such places.

PM Modi said, “Cleantech, special mobility zones, and battery swapping policy will provide momentum to green transport.” India is pursuing a multi-pronged strategy to cut carbon emissions, which includes a concerted push for electric vehicles. Maharashtra is planning to deregister fossil-fuel-powered vehicles beginning in 2030. The guidelines also call for only non-emission EVs and those powered by carbon-free next-generation fuels like hydrogen to be registered.

According to a government plan under consideration, all central government departments and their field offices could transition to electric vehicles over the next three years. In addition, the Centre has selected nine cities with populations of 4 million or more for fast EV adoption: Mumbai, Delhi, Bengaluru, Hyderabad, Ahmedabad, Chennai, Kolkata, Surat, and Pune. At the COP26 summit in Glasgow in November, Prime Minister Modi pledged to reduce India's carbon emissions by 1 billion tonnes by 2030, reduce the carbon intensity of the nation's economy by less than 45% by the end of the decade, and reach net-zero carbon emissions by 2070. The promise also calls for renewable energy to cover 50% of India's energy needs by 2030 and non-fossil fuel power generation capacity to reach 500 gigawatts (GW) by the end of the decade.

“Government’s sensitivities towards cities’ pollution is also been reflected in the budget. For this in cities, supporting clean and convenient mass transit system has been focussed upon,” PM Modi said.

Pollution in Delhi caused by crop stubble burning in Punjab and Haryana has been a yearly topic of contention between the two state governments. Rather of burning crop residue, farmers will be encouraged to convert it into pellets. Punjab, Haryana, Uttar Pradesh, Delhi, Rajasthan, and Madhya Pradesh are all experiencing a spike in stump burning. The proposal, tentatively dubbed SAMARTH, is part of the government's goal to aid India's energy transition while also reducing pollution from crop-stubble burning by transforming them into pellets and making them easier to sell. To generate electricity, the pellets are combined with coal.

The federal budget also included an additional allocation of Rs 19,500 crores (US$ 2.6 billion) for the flagship Production Linked Incentive (PLI) plan, which will assist create roughly 35 gigawatts (GW)-40 gigawatts (GW) of capacity. This is in addition to the already announced Rs 4,500 crores (US$ 602 million) PLI project for solar photovoltaic modules, which was expected to build 10 GW of integrated solar PV manufacturing capacity.

This comes at a time when the Green Climate Fund, which was set up to give developing countries with US$ 100 billion per year by 2020 to combat climate change, has gotten little traction. In April, India levied a 40% basic customs tariff on solar modules and a 25%n solar cells to encourage local manufacturing and reduce imports. The goal is to not just meet India's domestic needs, but also to become a major global supplier.

Ministry of new and renewable energy said in a statement on Tuesday, “As a part of the government’s overall market borrowings in 2022-23, sovereign Green Bonds will be issued for mobilizing resources for green infrastructure. The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy.”

The union budget also declared that energy storage solutions such as dense charging infrastructure and grid-scale battery systems will be included in the harmonised list of infrastructure, as well as encouraging the Energy Service Company (ESCO) business model in large commercial buildings. In addition, four pilot projects for coal gasification and chemical conversion will be established.

Given the intermittent nature of electricity from clean energy sources such as solar and wind, large batteries can help keep India's power systems stable. As part of its Clean Cooking Mission, the union government is also looking into running ships entirely on renewable energy and a hybrid concept that uses roof-top solar for cooking while also having an in-house battery system. India wants to play a bigger role in global supply chains, in addition to utilising its expanding green energy sector to boost manufacturing. PLI plans aim to turn India into a global manufacturing powerhouse by removing sectoral barriers and leveraging economies of scale to construct whole component eco-systems.

The government is also working on a plan to reduce carbon emissions called ROSHNEE (Roadmap for Sustainable and Holistic Approach via National Energy Efficiency), which will continue for nine years until 2030. The initiative, which was discussed in advance of the budget, might start with a corpus of around 5,000 crores (US$ 668.9 million) and a total spend of over 10,000 crores (US$ 1.33 billion) by 2030.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.