The Green Indian Budget 2022-23
The Union Budget 2022 is known for its focus on Climate change, Energy Transition and Green Investments. It is the need for Sustainable development in India that has forced Budget FY2022 to prioritise Green Practices to better tackle the current Environmental issues arising.
The budget plays a significant role in shaping the future of a nation. And in countries like India that have deep cultural, religious and environmental diversity, it is extremely important for the government to allocate its resources wisely.
For a responsible Indian citizen, learning about the budget allocation of FY22 towards sustainable development is of paramount importance. Let us look at some of the key allocations in the Budget for FY22, transitioning India toward a sustainable nation.
Are you Worried about Rising Fuel Prices? Go For Electric!
The Union Budget Ministry of India is estimated to spend Rs 2908.28 crore on the Scheme for the Faster Adoption and Manufacturing of Electric Vehicles [1]. Electric vehicles use lithium-ion batteries for generating power. And as a result, they do not emit harmful gasses as they are not reliant on fossil fuels for generating power which in turn reduces pollution and carbon footprint. The Finance Minister announced the PLI scheme on 'National Programme on Advanced Chemistry Cell (ACC) Battery Storage' for achieving a manufacturing capacity of 50 GigaWatt Hour (GWh) with a budgetary outlay of Rs 18,100 crore to further push the EV Industry [1].
The budget also mentioned the introduction of the Battery Swapping technology where battery swapping stations (BS) will be built where one can change their discharged batteries for freshly charged new ones. Being a country with a large population, India doesn't have enough space to build charging stations, which is why the BS technology is chosen.
Nickel ore and concentrates would also see customs duties reduced from 5 to nil, ferronickel from 15 to 2.5, and nickel oxide and hydroxide from 10 to free. Nickel Manganese Cobalt is key chemistry used in lithium-ion batteries, which are used in EVs. This will eventually lower the cost of production for EVs.[br] Also, special mobility zones are to be built for the EVs to run smoothly. It can’t be denied that the budget has been favourable toward the EV Industry.
A Budget for Clean Energy Transition
The Green Budget allocated Rs.19,500 crore for the PLI scheme for the manufacture of high-efficiency solar modules to meet India’s goal of 280 GW of installed solar power by 2030 [2].
By 2030, the government also aims to achieve 500 GW of renewable energy and a 50% non-fossil fuel energy share [2]. The Government has stated that it will have net-zero carbon emissions by 2070. But if we notice the tax rates of Solar Equipment. The government is charging 12% GST and 40% Basic Customs Duty (BCD) for Solar Equipment whereas Coal on the other hand are charged 5% GST [6].
This is where the problem lies for Manufactures and Renewable Energy Developers in managing the Cost of Production. In some ways, the Budget is favourable for Renewable Energy Transition but a closer look at it shows that the GST and BCD will create a problem for the RE developers and Customers.
How the Budget sinks Bundelkhand
Daudhan is a village located near the site of the Greater Gangau Dam, the main dam that would serve the proposed Ken-Betwa Link Project and there are in total of ten villages, including Daudhan, which are expected to be submerged underwater due to this project.
A total of 10,000 villagers will have to leave their homes, and farms and shift to a new place. No wonder the villagers are against this project. In spite of all the villager's disagreement, Finance Minister Nirmala Sitharaman has allocated Rs 1,400 crore for the implementation of The Ken Betwa River Interlinking Project [3].
It is the inter-linking of two rivers Ken and Betwa transferring water from the Ken river into the Betwa river through a canal which will irrigate Bundelkhand, a drought-prone region. It is claimed that the Ken river has surplus water that will be used for irrigation and drinking water supply. This is aimed at providing irrigation to 9.08 lakh hectares of farmers' lands” It is also claimed that it will provide a drinking water supply for 62 lakh people, 103 MW of Hydropower, and 27 MW of solar power [3].
Despite all the advantages, the project is not supported by Environmentalists And Ecologists. Upon completion of the project, nearly 9,000 hectares of land will be submerged in water, including 5,803 hectares in the Panna Tiger Reserve in Madhya Pradesh. [4].
The budget is hailed for its focus on Sustainable Development and a GREENER, GREATER India. But if we look closely while some of the allocations are in the right direction like the EV segment, on the other hand, it is contradicting its vision for a cleaner, greener and sustainable India.
Based on the cited facts, we would encourage you to draw your own conclusions about whether our Budget is ‘ Supporting Climate Action or No’.
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List of References
- Goswami, A., 2022. How green is Union Budget 2022-23? . Accessed May 19, 2022.
- Tyagi, H., 2022. Union Budget 2022: PLI scheme extended to solar equipment; allocates Rs 19500 cr boost for modules . Accessed May 19, 2022.
- Sharma, H., 2022. Rs 1,400 crore to implement Ken-Betwa river linking. The Indian Express . Accessed May 19, 2022.
- Perinchery A. Ken-Betwa Interlink Means 'Bundelkhand Will Suffer for Decades to Come.The Wire . Accessed May 19, 2022.
- S V. Budget 2022: EV segment to benefit from Nirmala Sitharaman’s policy measures. Firstpost. . Accessed May 19, 2022.
- Das B. Union Budget 2022-23: Where does renewable energy fit in this year?. Down to Earth. . Accessed May 19, 2022.