The Union Budget lays the roadmap for achieving net zero in 2070 but there must be an assurance of effective execution for a swift, data-driven, and inclusive green transition
By Tamali Chakraborty, Subhajoy Mahanta, Barun Kumar Thakur
The ongoing struggle between economic growth and environmental conservation has become a pertinent issue in recent years. The trade-off between economic growth and environmental conservation is leading to another trade-off — between inter and intragenerational equity. Climate change has become a global crisis and disproportionately affects developing nations, where there is a lack of resources for adequate adaptation with new technology to mitigate climate-induced risks.
India is the 7th most vulnerable nation and without a proper measure, a green future will remain a distant dream. Any deregulation can derail the progress towards a sustainable future. Finance Minister Nirmala Sitharaman has proposed India’s ambition to achieve net zero emissions by 2070 in the Union Budget 2025-26. This proposition arrives at a critical moment when economic growth needs to be in tandem with sustainable development. The pivotal task that lies ahead is how to address sustainable development.
Clean Energy a Reality
The Budget represents the roadmap for the visionary transition to clean energy by supporting sustainability and environmental conservation. It is a well-calibrated mix of incentives, investments and policy measures. While India has made significant progress in adopting renewable energy, upscaling remains challenging. The Rs 26,549 crore allocated for the renewable energy sector, an increase of Rs 9,251 crore from the previous year, confirms the focus on overcoming fossil fuel reliance. The government has reinforced its commitment towards the target of 500 GW of non-fossil energy capacity by 2030.
Coal accounts for over 50% of power generation, but there is no indication of coal retirement, and while the N-power initiative is commendable, safety protocol is crucial
The Finance Minister has offered a massive Rs 20,000 crore in the PM Surya Ghar: Muft Bijli Yojana, an 80 per cent increase from last year, encouraging millions of households to embrace solar power and reduce the consumption of fossil fuels. It is to empower electricity generation by lowering emissions. The PM-KUSUM scheme has received Rs 2,600 crore, up from Rs 2,525 crore last year. Its sole target is the solarisation of agricultural activities.
A reliable source of solar alternatives enhances irrigation efficiency and minimises the reliance on diesel. The Green Energy Corridor project has received Rs 600 crore to ensure a higher share of renewable energy by reducing dependency on coal and gas-based power plants. It improves grid stability and reliability. Green infrastructure and job creation boost economic growth.
The electrification of transportation has drawn intensive attention. For instance, the fiscal plan has spared scrap from lithium-ion batteries, lead, zinc and 12 other critical minerals from the basic Customs duty. The government has expanded the list of exempted capital goods to boost lithium-ion battery production for EVs and mobile phones, including 35 items for EV battery manufacturing and 28 for mobile phone battery production.
The policy will strengthen the domestic EV manufacturing sector. The target is to make EVs more accessible and affordable. According to a report in 2024, EVs made up 2.5 per cent of passenger vehicles. This percentage is likely to grow rapidly in the coming years. Along with reducing carbon footprints, it will create more employment opportunities. The Budget has allocated Rs 10,000 crore to promote clean technology and energy security.
Further Steps
Nuclear power has slowly become a key player in the goal of a green future. It can provide energy security with assurance to the net-zero target. An amount of Rs 20,000 crore has been assigned for Small Modular Reactors (SMRs), which are crucial for creating carbon-free energy. SMRs are flexible, modular and scalable ways to harness nuclear power. Due to their smaller size, they have lower environmental impacts.
In 2023, India generated only 3 per cent of electricity from nuclear power, which is low compared to global standards. The government has aimed for 100 GW through atomic power capacity by 2047. Five Made in India nuclear reactors are to be completed by 2033. Amendments to The Civil Liability for Nuclear Damage Act and The Atomic Energy Act will encourage private sector investments and partnerships, expanding the nuclear power sector.
The National Green Hydrogen mission got Rs 600 crore, double the previous year’s allocation, for further amplification. The government is targeting to produce 5 million tonnes of green hydrogen by 2030, making India a leading producer and exporter. Shifting from dependency on fossil fuels is critical in addressing emissions.
The approach to sustainability can be achieved both ways: by energy efficiency and transitioning to renewables. Hence, the Budget also focuses on waste management and water conservation. The Jal Jeevan Mission has aided 80 per cent of the rural people since 2019. For the complete coverage, the government has extended the mission till 2028 with an allocation of Rs 67,000 crore. The primary target will be the quality of infrastructure, operations and maintenance of rural piped water supply schemes through Jan Bhagidhari. To ensure proper citizen-centric water service delivery, separate MoUs will be signed with the States. The financial plan also includes a policy for recovering critical minerals from mining waste.
Another important highlight is the allotment of Rs 20,000 crore to foster sector-driven innovations and support research and development. The Budget, with a strong commitment to renewable energy, nuclear power, and green hydrogen infrastructure, paves the way to hitting net zero emissions by 2047.
Some Concerns
With all these financial commitments and innovative policies, India will evolve into a remarkable green economy. However, a few concerns persist. Coal accounts for more than 50 per cent of power generation, but there have been no indications of coal retirement, unlike the previous Budgets. The initiative to go with nuclear power is commendable, but it is necessary to account for the safety protocol. Responsibility lies in overcoming the serious risks of environmental impacts and toxic waste. With the long gestation period of nuclear projects, they may fail to keep up with the fast energy transition needed.
There must be an assurance of effective execution for a swift, strategic, data-driven and inclusive green transition by prioritising decarbonisation. Appropriate steps are necessary to preserve nature and biodiversity and only policies and initiatives are not enough to bring the changes.
Consumers need to practice responsible consumption and be a part of sustainability measures by understanding the economic and environmental impacts of their consumption choices. The active participation of producers too is essential to usher in energy transition. The involvement and endeavours of Indian citizens will help India emerge as a global leader in the green economy and achieve net zero by 2070.
