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Budget Needs To Boost Green Growth

Context

The inclusion of green growth as one of the seven core economic priorities, which coincides with India’s G20 presidency, demonstrates India’s dedication to a sustainable future.

Relevance

GS Paper-3: Inclusive growth and issues arising from it,Government Budgeting

Mains Question

How does green growth work? How does the Indian government ensure green growth? (250 words)


How does green growth work?

  • Green growth refers to promoting economic expansion and development while ensuring that natural resources and environmental services that are essential to our wellbeing continue to be provided.
  • To achieve this, it must stimulate investment and innovation, which will support long-term growth and create brand-new business opportunities.

What Does It Hope to Accomplish?

  • Increasing productivity through the creation of incentives for more effective use of natural resources, the reduction of waste and energy use, the opening of doors for innovation and value creation, and the allocation of resources to uses that will yield the greatest returns.
  • Increasing investor confidence by making major environmental issues more predictable from a government perspective.
  • Creating new markets by boosting consumer demand for eco-friendly products, services, and technologies.
  • Supporting fiscal consolidation by raising funds through environmental taxes and the elimination of subsidies that harm the environment. These actions may also help to generate or free up funds for anti-poverty initiatives in sectors like water supply and sanitation, as well as for other investments that benefit the poor.
  • Reducing the likelihood of damaging and potentially permanent environmental impacts as well as negative shocks to growth caused by resource bottlenecks.

How does the government promote green growth?

  • As one of four opportunities that could transform India in the years leading up to 2047, the nation’s 100th year of independence, the finance minister mentioned “green growth.”
  • The other three are: o tourism; o integrating traditional artisans with the MSME sector; o economic empowerment of women.
  • Nationally Determined Contribution (NDC): India formally updated its NDC to combat climate change last August, reaffirming to the United Nations Framework Convention on Climate Change that it will reduce the emissions intensity of its Gross Domestic Product (GDP) by 45% from 2005 levels by the year 2030 and source about 50% of its energy needs from non-fossil fuel-based sources by the same date.
  • PM PRANAM, a programme that will be introduced to encourage states and union territories to promote alternative fertilisers and balanced use of chemical fertilisers, stands for the Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth.
  • GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan): o GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) will launch 500 new “waste to wealth” plants to support the circular economy.
  • 200 compressed biogas (CBG) plants totaling Rs. 10,000 crore will be among them.
    • A 5% CBG mandate will soon be imposed on all businesses that market natural and biogas.
    • Appropriate financial support will be given for the distribution of bio-manure and the collection of bio-mass.
  • MISHTI (Mangrove Initiative for Shoreline Habitats & Tangible Incomes): Through the convergence of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and Compensatory Afforestation funds, it will concentrate on mangrove plantations along the coastline and on salt pans.
  • Amrit Dharohar: The government will support local communities’ conservation efforts through this programme, which will be put into place over the next three years in order to encourage the best possible use of wetlands and improve bio diversity, carbon stocks, eco-tourism opportunities, and local communities’ ability to generate income.
    • Using a PPP model and viability gap funding, coastal shipping will be marketed as an energy-efficient mode of transportation.
  • Agriculture Accelerator Fund: The Agriculture Accelerator Fund, which was mentioned in the budget, will give entrepreneurs essential funding to spur innovation.
  • Green Credit Program: o The Green Credit Program, which aims to encourage individuals, groups, and local governments to adopt more environmentally friendly behaviours, was mentioned in the Budget.
  • Energy Conservation Bill: o The Energy Conservation Bill aims to establish a domestic carbon market. When coupled with the anticipated resurgence of UN-approved international carbon trading, the government can both encourage India to become the world’s top producer of carbon offsets and offer overarching direction to industries for their long-term decarbonization strategies.
  • Municipal bonds, also known as Muni bonds, have been shown to be effective tools for cities to raise money for the construction of green infrastructure on a global scale.
    • The recent success of the issuance of green bonds in Indore and Ghaziabad for a waste plant demonstrates the potential of green financing to create sustainable cities in India.

Conclusion

  • In order to fulfil previous commitments and create new opportunities for economic growth, execution will be crucial.
  • Only 1% of the Sustainable Alternative towards Sustainable Transportation (SATAT) scheme’s goal of 5,000 compressed biogas plants by 2023 has been reached so far, and only 60% of the 175GW of renewable energy target for 2022 has been met.
  • The financial resources allocated to projects and programmes marketed as environmentally friendly or addressing climate change are reflected in the Union Budget.
  • Although this focus is crucial, it must be situated within the knowledge that, once funds have been allocated, they will inevitably translate into specific projects, such as green manufacturing, plantations, renewable energy, or linear infrastructure.
  • Each of these sectoral investments needs to be carefully examined with regard to ecological safeguards and social cost assessments, both of which are challenging to incorporate into project planning and execution.

February 2024
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