Budget 2023: FM Nirmala Sitharaman pushes for green reforms, focuses on India's net zero target

The Budget 2023, which was presented today by the Finance Minister Nirmala Sitharaman, for the first time focuses on 'Green Growth' on the back of India’s net zero target, which the country seeks to attain by 2070.

“We are implementing many programmes for green fuel, green energy, green farming, green mobility, green buildings, and green equipment, and policies for efficient use of energy across various economic sectors. These green growth efforts help in reducing carbon intensity of the economy and provides for large- scale green job opportunities,” said Sitaraman.  

Ranging from the National Green Hydrogen Mission that will facilitate the transition of the economy to low carbon intensity to setting up 500 new ‘waste to wealth’ plants under GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan), all these initiatives were highlighted in the Budget speech by the Finance Minister.

“Budget 2023 prioritises inclusive development and green growth -- a marked and welcome direction in the country's policy making -- will pave the way for sustainable gains towards India @100. Finance Minister's budget speech shows alignment of government vision to sustainable development goals. In a first, the budget seems to place green considerations as a critical driver and enabler of economic growth,” noted Shivananda Shetty, Partner and Head, ESG, KPMG in India.

Green Hydrogen Mission

The recently launched National Green Hydrogen Mission, with an outlay of Rs 19,700 crore, will facilitate transition of the economy to low carbon intensity, reduce dependence on fossil fuel imports, and make the country assume technology and market leadership in this sunrise sector. "Our target is to reach an annual production of 5 MMT by 2030," Sitharaman noted.

Energy

A lot of initiatives have been undertaken by the government for energy. The Budget 2023 provides Rs 35,000 crore for priority capital investments towards energy transition and net zero objectives. To steer the economy on the sustainable development path, Battery Energy Storage Systems, with capacity of 4,000 MWH, will be supported with Viability Gap Funding. A detailed framework for Pumped Storage Projects will also be formulated. For Renewable Energy Evacuation, an Inter-state transmission system for evacuation and grid integration of 13 GW renewable energy from Ladakh will be constructed with investment of Rs 20,700 crore including central support of Rs 8,300 crore.

Green Credit Programme

For encouraging behavioural change, a Green Credit Programme will be notified under the Environment (Protection) Act. While the details haven’t been released yet but this will incentivise environmentally sustainable and responsive actions by companies, individuals and local bodies, and help mobilize additional resources for such activities.

Colliers’ Head of Research, Vimal Nadar said: “The government’s commitment towards meeting net zero target remains unabated. Fresh provisions related to green hydrogen mission, priority capital investment in energy transition, augmentation of battery infrastructure, thrust to EVs and the green credit programme are innovative and impactful.”

PM-PRANAM

Along with focus on Green Hydrogen Mission, energy and Green Credit Programme, a PR-PRANAM initiative will be launched. PM-PRANAM stands for PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth, and will be launched to incentivise States and Union Territories to promote alternative fertilizers and balanced use of chemical fertilizers.

GOBARdhan scheme

500 new ‘waste to wealth’ plants under GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme will be established for promoting circular economy. These will include 200 compressed biogas (CBG) plants, including 75 plants in urban areas, and 300 community or cluster-based plants at total investment of Rs 10,000 crore. A 5 per cent CBG mandate will be introduced for all organizations marketing natural and bio gas. For collection of bio-mass and distribution of bio-manure, appropriate fiscal support will be provided.
 

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