Climate budget for Incredible India to make sustainable India

Climate budget for Incredible India to make sustainable India 

The Climate change is one of the biggest threat in this planet. it is no more an environmental issue. Climate change is transforming the way we think about the security and becoming one of the greatest threats to global security. Climate change knows no borders and it presents an existential challenge to all of us. The UN security summit called it the “number one threat to mankind” World Economic Forum listed climate change is the one among the top 10 global challenges. 

 

To address climate change, countries adopted the Paris Agreement and most of the countries are working towards the commitments to build a low carbon economy. Climate change action mitigation measures and adaptation measures requires planning over a long horizon in the face of uncertainty as well as for many governments, costly financing in the near term. We also notice the flows of international climate finance have grown in recent years, it has become ever clearer that countries need to consider all policy instruments. Climate change is going to affect, in particular the core business of finance ministries related to fiscal policy, government budgets, and public debt. 

The Government's should emphasise public expenditure management for climate actions rather than the full spectrum of finance ministry responsibilities. Climate change planning shares some common challenges with other national policy objectives where multiple interests need to be managed - but also presents some unique complexities. We need to prepare the research report that presents several measures of immediate interest to finance ministries for better fiscal planning and expenditure management of climate actions. Research reports on public expenditure should highlight general areas of financial and expenditures management where improved practice will better prepare finance ministries to deal with the fiscal implications of climate change: 

• Including climate change as a long-term objective in the national budget and expenditure framework;
• Improving financial tracking and performance accountability by spending agencies;
• Strengthening government financial management systems to efficiently use external climate finance. 

Targeted at the climate budget, these actions will also promote financial discipline and overall lead to more efficient and strategic public spending. The research report should provide finance officials with detailed recommendations based on the experience of World Bank client countries.

 The Indian government has shown strong will and has been vocal about the importance of moving the nation towards a greener tomorrow. But climate change action plans need  more vigorous and urgent attention. If not, ignoring climate change risk in the national financial strategy will turn costly for India in the future. The total budgetary allocation for India's Ministry of Environment, Forest and Climate Change has been reduced to INR 28.7 billion (USD 400 million) compared to INR 31 billion (USD 420 million) in 2020-2021budget. The focus is required by the Government on the current climate change relevance and sensitivity of public expenditure in all sectors. So it is important the full budget of the country should be climate budget. there is an opportunity to prioritize efforts that work towards building a clean, resilient, and least-cost energy future for India.

Climate budget  provides comprehensive data on climate-relevant spending, enabling government to make informed decisions and prioritize climate investments. Climate budget tagging (CBT) enables public scrutiny on government and donors' spending on tackling climate change issues strengthening accountability and transparency.

SPENDING THE MONEY WISELY

There are specific ways in which budgetary spending can accelerate economic recovery and offer long-term environmental benefits. By having a Proffessional managed Government financial institution to enable infrastructure Financing which should focus on sustainable infrastructure lending based on certain criteria like standard for sustainable and Resilient infrastructure. The financial institution can also set a minimum disaster-resilient standard for infrastructure project lending, which is well-aligned with the objectives of the Coalition for Disaster Resilient Infrastructure an international coalition launched by India. And, the new institution can participate in global initiatives such as the UN-supported Principle of Responsible Investment (PRI), demonstrating India’s commitment to climate change.

The 2020-21 budget  proposed to infuse INR 3,000 billion (USD 40.8 billion) into India’s electricity sector through a reform-based, result-linked power distribution scheme. The government should direct India’s electricity distribution companies (DISCOMS) to set a higher renewable energy procurement target, shorten the delays in payment of dues and incentivize smart metering. Such initiatives would also highlight India’s commitment to accelerate clean energy adoption. Study says increasing the Renewable energy  in global energy mix may boost the Global GDP of 1.1% by 2030. The 2020-21 Budget also announced INR 180 billion (USD 2.44 billion) budget allocation for public bus transportation services (with a target to run 20,000 buses in cities), the government should earmark a majority of the budget for electric buses and necessary supporting infrastructure, especially as electric buses are more affordable to operate and maintain in the long run. Since the budget has emphasized the deployment of innovative models to enable private sector players to invest in public transportation services, innovative business models for electric buses.

Agriculture continues to remain a key focus area for the government, but there is not enough emphasis on sustainable agriculture, which is essential for India’s food security. The allocation for rural infrastructure development fund has increased from INR 300 billion (USD 4.08 billion) to INR 400 billion (USD 5.44 billion). The micro-irrigation fund corpus was doubled to INR 100 billion (USD 1.36 billion). These agriculture and agro-based funding initiatives could be used to promote sustainable agriculture and eco-friendly farming practices.

Similarly, the budget includes proposed tax incentives for affordable housing and rental housing projects. These should be structured to encourage projects that align with green building standards – green buildings can reduce water consumption by over 20-30%, generate 50% less waste and reduce carbon emission by 35%. Affordable housing would also reduce the government’s subsidy burden in the future since the state subsidizes most of the households’ electricity bills.

The Odisha State government has already taken an initiative and chosen 8 sectors in the budget to make it a climate budget. 

Agriculture, Coast and Disaster, Energy, Fisheries and ARD , Forest and Environment, Health and Family Welfare, Housing and Urban Development, Industries, Steel & Mines, Transport, Water Resources

The detailed study and analysis report is required to be prepared. Which can be recommend to the Govt of India as well many states in the country. The purpose of  analysis to assist the Government in first identifying sectors and schemes to focus on to improve climate resilience and mitigation outcomes, and secondly to support government in deciding whether programmes need redesigning or additional funding to accommodate changes needed to deliver climate benefits and / or safeguard projects from the impacts of climate change. This may support the Government in securing broader development benefits of large scale investments being made and would help to avoid potential future losses that climate change would exacerbate, thereby helping to achieve Country climate response agenda.