Does the Union Budget stand for a “Green Mother Earth and Blue Skies”? – Part II

(Part II of a two-part series)

The vision statement of our current Union Budget, as articulated by Finance Minister Nirmala Sitharaman, is a “Pollution-free India with Green Mother Earth and Blue Skies”. Yet, it proposes no road map for carrying out the missions specified under the National Action Plan of Climate Change (NAPCC) formulated in 2008.

Take the National Action Plan on Clean India (NCAP). One of the election promises of the ruling party election promise was to reduce the air pollution in 102 polluted cities of India by 35% in the next five years. However, after it was addressed in the budget presented by late Finance Minister Arun Jaitley in 2014-15, the term ‘climate change’ has not found space again in the four subsequent budget speeches (2015-16, 2016-17, 2017-18 and 2018-19) under the same government. The new budget placed in Parliament lacks comprehensive funding strategy for multi-sector clean air action under the NCAP. The only way to make the new budget work for clean air is to leverage some of its proposed spending in transport and energy sectors.

The budget reiterates the official aspiration to upscale the electric vehicle (EV) programme, make it a frontier industry, and turn India into a global manufacturing hub of EVs. This zero-emissions initiative will work toward clean air as well. 

The proposal highlights Phase-II of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) Scheme to enable faster rollout of EVs, with an approved outlay of Rs 10,000 crores for three years, already in place since April 2019. There will be upfront incentive on purchase of EVs, solar storage batteries and charging infrastructure. This performance-based incentive is linked to advanced batteries and registered EVs, with greater emphasis on affordable and environment-friendly public transportation options.

The Goods & Services Tax (GST) on EVs has already been lowered from 12 per cent to 5 per cent. There will be an additional income tax deduction of Rs 1.5 lakh on the interest paid on loans taken to purchase EVs. This amounts to a benefit of around Rs 2.5 lakh over the loan period to taxpayers who borrow to purchase EVs. While there is no doubt that the e-vehicle programme will require fiscal and incentive support, it has to draw lessons from the experience so far.

An incentive programme will not work by itself. It needs a strong legal mandate for phased electrification of vehicles, a fixed timeline for intermediate goals for infrastructure, a deployment strategy, and compliance mechanisms to see real change.

It is encouraging to see the continued thrust on access to clean household-cooking energy and electricity. Various studies across India have shown that household air pollution contributes at least 25-30 per cent of the outdoor particulate pollution and significantly harms health of women and children. It is envisioned that every single rural family that is willing will receive an electricity connection and clean cooking facility by 2022. The overall emphasis on 100 per cent households with LPG (liquefied petroleum gas) and electricity connections will lead to distribution companies reforming their electricity supply system for greater reliability, and scaling-up of LED bulbs production for households to replace incandescent bulbs and CFLs. Both consequences can contribute towards clean air and health benefits.

However, going forward, the government must draw lessons from the ongoing programme. Shifting clean fuel subsidy from the rich to the poor will work effectively only if it ensures continuous reliable refills of LPG cylinders so that households continue to use LPG and do not fall back on mixed fuel mode. Pricing of clean fuels for the poor also need further attention and the status quo approach to such welfare programmes needs to change. 

Also, the renewable energy industry expected the budget to provide some impetus to revive growth, given the slowdown in the past year. The sector expected reduction of GST for solar projects and availability of adequate and cheap credit. However, there is nothing specific in the Budget to address these concerns. Going by past experiences, improving distribution sector’s efficiency requires broader structural reforms, such as carriage and content separation as proposed in the Electricity Act amendment. However, this is unlikely to be taken up at the moment. Meanwhile, a key area that needs dedicated attention and has been snubbed by the budget is solar rooftop panels. India is staring at a massive target of generating 40 GW of electricity through solar rooftop panels by 2022, with only 1.9 GW of capacity installed. Budgetary capital allocation or at least the announcement of a dedicated policy or scheme to fuel rapid growth of the renewables sector would have been welcomed but are missing.

Although Sitharaman tried to give a serious boost to energy and transport sectors, where is the resource allocation for climate-critical sectors, with respect to land and food security, as identified by the NAPCC 2008 and emphasized by IPCC in 2019? Where are the funds allocated for incentivising water-neutral and water-positive technologies, to boost the National Water Mission, a key mission under the NAPCC? Where is the policy framework to establish a monitoring and observational network under the National Mission for Sustaining the Himalayan Ecosystems? Where is the action plan aiming at afforestation of 6 million ha of degraded forestland with the participation of Joint Forest Management Committees (JFMCs) under the National Mission for “Green India”? 

We do not have answers. Besides, the new Draft National Forest Policy has only a few propositions to substantially increase the tree cover outside forests by incentivising agro-forestry and farm forestry; incentivising sustainability in community-managed and community-owned private forests and creating a sustained peoples’ movement; and managing and expanding green spaces in urban and peri-urban areas to enhance citizens’ wellbeing.

The Budget also doesn’t propose any framework for strengthening agriculture and weather insurance mechanisms and credit support mechanisms under the National Mission for Sustainable Agriculture. More importantly, there is no mention of creating a Climate Science Research Fund for providing funds for research under National Mission on Strategic Knowledge for Climate Change.

The NITI Aayog  and Nirmala Sitharaman must find answers to these questions urgently, and they must present them to the fourteenth meeting of the Conference of the Parties to the UN Convention to Combat Desertification (UNCCD COP 14) which kicks off at New Delhi today.

Lack of answers to any of the questions asked above would simply make the term “Sustainable Development” a mere oxymoron, as many of our conservationist friends have started believing already.

Arnab Basu

Arnab Basu is a Sustainability Consultant, with 15 years of experience in advising industries and institutions on sustainability governance, environment and safety performance and complaisance.

The views and opinions expressed in the article are those of the authors and do not necessarily reflect the official policy or position of The Tilak Chronicle and TTC Media Pvt Ltd.

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