Climate change and its impacts, like the heatwave-related deaths of over 100 people, have been wreaking havoc in India, and the government was well aware of them. 

The Secretariat takes a closer look at what the budget means from the lens of climate change and sustainability.

Climate Resilient Crops 

Finance Minister Nirmala Sitharaman drew attention to the agriculture sector and highlighted plans of the government to focus on climate-resilient crop varieties. 

“Our government will undertake a comprehensive review of the agriculture research set up to bring the focus on raising productivity and developing climate-resilient varieties,” she said. 

Sitharaman stated 109 new high-yielding and climate-resilient varieties of 32 field and horticulture crops will be released for cultivation. 

The government's intentions seem to address the adverse impact of climate change on the agricultural sector. 

That said, schemes such as the Pradhan Mantri Krishi Sinchai Yojana (PMKSY), and the crop insurance scheme, could have gotten more attention. 

Among the PMKSY components is the aspect of focusing on water efficiency for irrigation, as well as recharging natural aquifers, which are under strain due to the cultivation of water-intensive crops across the country. 

Irrigation usage of water is a looming threat, considering rice, wheat, cotton and sugarcane together consume up to 70 per cent of all the water used in agriculture.

As of 2023, the government has spent Rs 6,380 crore on the scheme and the budget estimate for 2024-25 is Rs 11,391 crore.

Similarly, the crop insurance scheme could have been buffed up. The scheme is intended to safeguard farmers from financial losses due to the destruction and damage of crops by extreme weather and natural disasters. 

It works as a loss and damage fund for farmers who lose their livelihood due to climate change. The government allotted Rs 10,296 crore for the scheme in 2022-23 and increased the budget estimate to Rs 14,600 crore for 2024-25.

Support To Energy Transition

Sitharaman noted the government is implementing many programmes for green fuel, green energy, green farming, green mobility, green buildings, green equipment, and policies for the efficient use of energy across various sectors. 

She added, “These green growth efforts help in reducing carbon intensity of the economy and provide for largescale green job opportunities.”

No doubt, the budget acknowledged the seriousness of the government in curbing emissions. The PM-Surya Ghar: Muft Bijli Yojana is a plan that aligns with India’s energy transition targets. 

Announced in the interim budget tabled in February, the scheme has been given a budget estimate of Rs 6,250 crore for 2024-25. It aims to achieve the target of solarising 1 crore households with rooftop solar installations within a year. The scheme is a booster shot for India’s energy transition targets. 

The Finance Minister also noted that the scheme has so far got 1.28 crore registrations and 14 lakh applications. She said the government will bring out a policy document on appropriate energy transition pathways that balance the imperatives of employment, growth and environmental sustainability.

As far as the diversification of the energy sector is concerned, the budget showed it was keen to ramp up energy transition, which is in line with what was mentioned in the Economic Survey 2023-24. 

The government is planning to roll out a policy for pumped storage for electricity storage and smooth integration of renewable energy in the overall energy mix.

Not only solar, thermal power is also getting a push. A joint venture between NTCPL and BHEL will set up a full-scale 800 MW commercial thermal plant using AUSC technology—an efficient way to generate electricity in thermal plants with less harm to the environment.

Nuclear power also found a mention in Sitharaman’s budget speech as she stated nuclear energy is expected to play a significant role in Viksit Bharat's energy mix for Vikisit Bharat. 

She said the government will partner with the private sector to set up Bharat Small reactors and for R&D of Bharat Small Modular Reactors and newer nuclear energy technologies.

These energy transition efforts will contribute significantly to mitigating emissions. Moreover, the diversification of energy resources will help India sustain the volatile geo-economic market.

Another addition to mitigation measures is the establishment of a compliance market for the carbon credit scheme. “A roadmap for moving the ‘hard to abate’ industries from ‘energy efficiency’ targets to ‘emission targets’ will be formulated. Appropriate regulations for transition of these industries from the current ‘Perform, Achieve and Trade’ mode to ‘Indian Carbon Market’ mode will be put in place,” she said. 

With the Bureau of Energy Efficiency recently releasing detailed procedures for compliance mechanisms under the Carbon Credit Trading Scheme, the government's announcement for the roadmap comes on time. 

Sustainable Mobility

The customs duty exemption on the import of lithium, cobalt and other rare minerals will aid sustainable mobility. 

While the third instalment of the Scheme for Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles in India hangs fire, the custom duty exemption comes as a breather for Electric Vehicle and Hybrid makers. 

The budget's big-ticket schemes are in line with India’s battle with climate change but implementation of some schemes holds the key.