Everything Green in India's 2023 Budget

Dear Subscribers,

I am thrilled to bring you a special edition of Green Investments: India, where I have collated all the green initiatives, investments and other information announced in India's 2023 Union Budget.

From new policies to investment opportunities, this edition covers it all and provides you with overview of the country's efforts to promote sustainability and protect our planet. Whether you're a seasoned investor or just looking to stay informed about the latest developments in the green space, this edition has something for everyone.

I hope you enjoy reading this edition and find it informative and inspiring. If you have any questions or comments, please don't hesitate to reach out.

Best,

Karan Madan

News from India's 2023 Union Budget

The Indian government is making a strong push for green growth, with a focus on sustainable development and reducing carbon intensity of the economy. In her speech to the parliament, Finance Minister Nirmala Sitharaman in her budget speech announced several new initiatives and investment plans for the country's transition to a greener future.

Sovereign Green Bond (SGrB)

The Central Government, as a part of its overall borrowing ceiling, has decided to bring Sovereign Green Bond (SGrB) in FY 2022-23, as announced during the Budget Speech. The government is expected to raise 16,000 crore through SGrB, which has a framework document that was made public on September 9, 2022. The SGrB is expected to help the Union Government garner additional finances from potential investors for deployment in public projects aimed at the green economy.

On January 25, 2023, the Reserve Bank of India (RBI) successfully auctioned SGrB worth 8,000 crore for maturities of 5 years and 10 years.

Energy and Subsidies

Rising energy demand has led to an increase in fuel imports, including crude oil and petroleum products, which rose to 29.7% of total imports during April-December 2022, compared to 25.5% in the same period last year. Despite this, exports of goods and services posted a growth of around 16% in US dollar terms during April-December 2022 compared to April-December 2021 (US$ 568.57 billion vs US$ 489.69 billion).

In FY 2022-23, due to the sudden outbreak of geopolitical conflict that jeopardized food and energy security, there was a higher food and fertilizer subsidy requirement for supporting the vulnerable and ensuring macroeconomic stability.

In 2021-2022, the Indian Government spent INR 6,747 crore on Green Revolution, INR 53,696 crore on energy, and INR 34,23 on petroleum subsidies.

The government expects to spend INR 9,171 crore in 2022-2023 and 2,257 crore the year after in petroleum subsidies.

They expect to spend INR 70,936 crore in 2022-2023 and INR 94,915 crore the year after on energy.

Green Hydrogen Mission

The recently launched National Green Hydrogen Mission has an outlay of INR 19,700 crore to help the country become a leader in low carbon intensity and reduce dependence on fossil fuels. The government aims to reach an annual production of 5 million metric tons by 2030.

Energy Transition and Storage

The budget has allocated INR 35,000 crore for priority capital investments in energy transition and energy security, and a viability gap funding will be provided to support Battery Energy Storage Systems with a capacity of 4,000 MWH. A detailed framework for pumped storage projects will also be formulated.

Renewable Energy Evacuation

The inter-state transmission system for evacuation and grid integration of 13 GW renewable energy from Ladakh will be constructed with an investment of INR 20,700 crore, including central support of INR 8,300 crore.

Green Credit Programme

A Green Credit Programme will be notified under the Environment (Protection) Act to incentivize environmentally sustainable actions by companies, individuals, and local bodies, and help mobilize additional resources for such activities.

PM-PRANAM

The "PM Programme for Restoration, Awareness, Nourishment, and Amelioration of Mother Earth" will be launched to incentivize states and Union Territories to promote alternative fertilizers and balanced use of chemical fertilizers.

GOBARdhan scheme

500 new waste-to-wealth plants will be established under the GOBARdhan scheme to promote a circular economy, with a total investment of INR 10,000 crore.

Bhartiya Prakritik Kheti Bio-Input Resource Centers

Over the next three years, 1 crore farmers will be facilitated to adopt natural farming with the help of 10,000 Bio-Input Resource Centers.

MISHTI

The "Mangrove Initiative for Shoreline Habitats and Tangible Incomes" (MISHTI) will be taken up for mangrove plantation along the coastline and on salt pan lands, through convergence between the MGNREGS, CAMPA Fund, and other sources.

Amrit Dharohar

The government will promote the unique conservation values of wetlands through the Amrit Dharohar scheme over the next three years to encourage optimal use of wetlands, enhance biodiversity, carbon stock, eco-tourism opportunities, and income generation for local communities.

Coastal Shipping

Coastal shipping will be promoted as an energy-efficient and lower-cost mode of transport for both passengers and freight through a PPP mode with viability gap funding.

Vehicle Replacement

The government will allocate funds to replace old, polluting vehicles of the central government, and states will also be supported in replacing old vehicles and ambulances.

Green Mobility and Green Fuel

To promote green mobility, the Central Government has taken several initiatives. Excise duty has been exempt on blended Compressed Natural Gas (CNG), with the exemption being equal to the Goods and Services Tax (GST) paid on Bio Gas/Compressed Bio Gas contained in the blended CNG. Customs duty exemption has also been extended to the import of capital goods and machinery required for the manufacture of lithium-ion cells for batteries used in electric vehicles.

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Until Next Time!