Urgency for Climate Action
The upcoming Union Budget must address India’s climate commitments, with a focus on the green energy transition and meeting the 2030 renewable energy target.
Previous budgets have shown commitment to climate action, but challenges remain in accelerating progress towards renewable energy goals.
Key Measures for Green Energy and Innovation
PM Surya Ghar Muft Bijli Yojana: Needs a review and enhanced fiscal support to close implementation gaps, prioritizing innovative financial instruments for lower-income households.
Solar Manufacturing: The Budget should expand Production-Linked Incentives (PLI) for solar module manufacturing to reduce domestic supply shortages and high costs.
Railways for Renewable Energy: Encourage public-private partnerships to utilize railway land for solar and wind energy projects, potentially generating 5 GW of energy.
Supporting Export Competitiveness and Circular Economy
Carbon Border Adjustment Mechanism (CBAM): A “Climate Action Fund” should be established to support MSMEs in meeting carbon compliance, preventing carbon levies on exports to the EU.
Circular Economy: The Budget should incentivize recycling and refurbishment technologies, with tax benefits and a green bond framework to finance circular economy infrastructure.
Building Climate Resilience and Green Finance
Tax deductions for insurers offering climate-linked policies and reduced GST rates on climate resilience insurance could increase coverage.
Standardizing green finance definitions and developing infrastructure for climate finance will attract investment needed for India’s climate goals.
Introducing differential tax treatment for climate-friendly investments and classifying government expenditure according to green criteria can drive sustainable growth.
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