Budget 2023-24: Nurturing Green Growth

By Shailja Tripathi February 02, 2023

The Budget is a landmark first step towards Narendra Modi’s government’s commitment towards Net Zero by 2070

Budget 2023-24: Nurturing Green Growth
FM Nirmala Sitharaman with Budget 2023-24. Outlook Images

The Union Budget 2023 presented by Indian Finance Minister Nirmala Sitharaman has taken significant strides towards promoting a green energy transition in the country. The Budget has allocated Rs 35,000 crore for priority capital investment towards energy transition and Net Zero objectives. 

To strengthen the nation's renewable energy sector, the government has allotted Rs 10,222 crore to the Ministry of New and Renewable Energy. The Centre had given Rs 6,900 to the ministry in the previous Budget. This will help reduce reliance on fossil fuels and foster the use of clean and sustainable energy sources. 

There is an uptick in the budgetary allocation for the solar sector. As opposed to Rs 3,365 crore in the last budget, solar power industry has received Rs 5,331.5 crore in this current budget, which includes funds for on-grid grid and off-grid projects. 

The inclusion of green growth as one of the Saptarishis or the seven key priorities in this year’s budget reflects the government’s commitment towards the Net Zero 2070 target and allied climate goals. Bose Varghese, Senior Director – ESG, Cyril Amarchand Mangaldas, says, “The Budget goes big on green growth. The Net Zero push sees investments in energy transition, energy storage, and interstate power transmission.” 

Elaborating on the fifth priority, green growth, finance minister said in her budget speech:  “The Prime minister has given vision for LiFE, or lifestyle for environment. To spur a movement for environmentally conscious lifestyle, India is moving firmly for the Panchamrit, the net zero carbon emission by 2070, usher in green industrial and economic transition. This budget builds on our focus on green growth."  

The minister also announced support for the installation of a 4,000 MwH battery energy storage system when presenting the budget.  

One noteworthy announcement is the establishment of regulations for the Green Credit Programme, which will be governed by the Environmental Protection Act. This move will incentivise the distribution of additional resources and environmentally sustainable and responsive actions by companies, individuals and local bodies; provide fiscal incentives; and support the Government of India's LiFE programme, promoting a pro-planet, pro-people way of life, says Manish Dabkara, Chairman and MD EKI Energy Services Ltd and President CMAI (Carbon Markets Association of India). 

Viability gap funding will be provided to pumped storage projects and battery energy storage systems with a capacity of up to 4,000 megawatt-hours in order to pique investor interest. 

For the Rs 20,700 crore interstate transmission line being created for the evacuation and grid integration of 13 gigawatts of renewable energy from Ladakh, central help of Rs 8,300 crore has been announced. 

Lauding the budget, Shailendra Singh Rao, Managing Director and Founder of Creduce, says, “This budget is a landmark first step towards Narendra Modi’s government’s commitment towards Net Zero 2070. This was a long time coming. And it has come with a bang. The outlay is futuristic, decisive and milestone driven. The budget places a substantial emphasis on green growth and sustainability.”