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This story has been updated
Union Finance Minister Nirmala Sitharaman stressed on ‘Green Growth’ and clean energy transition in her budget speech delivered in the Parliament on February 1, 2023.
The Ministry of New and Renewable Energy (MNRE) was allocated Rs 10,222 crore, a 48 per cent hike from the previous budget of Rs 7,033 crore.
But the MNRE budget is equivalent to just 26 per cent of the Ministry of Petroleum and Natural Gas’s allocation, at Rs 41,007.72 crore. And compared to the total budget allocation of Rs 45 lakh crore, MNRE budget amounts to just 2.2 per cent.
This meagre allocation for the sector is inconsistent with India’s Nationally Determined Contributions to address climate change. The country has pledged to reduce the emissions intensity of its GDP by 45 per cent by 2030 from its 2005 levels, as per the updated NDC.
On the other hand, the highly polluting coal sector, which plans to continue to expand its coal mines, was allocated Rs 192 crore, equivalent to less than 2 per cent of the MNRE budget (Rs 10,222 crore).
In addition, Finance Minister Nirmala Sitharaman had said, “This Budget provides Rs 35,000 crore for priority capital investments towards energy transition and net zero objectives and energy security by Ministry of Petroleum and Natural Gas.”
However, Vibhuti Garg, South Asia director of the Institute for Energy Economics and Financial Analysis, told Down to Earth, that how this money will be distributed is not clear at this point as the budget only mentioned the MoPNG.
On the bright side, compared to the previous years, various projects within the MNRE received a huge boost. Among them is the increase in the money allocated towards off-grid solar projects.
The budget increased to Rs 361.50 crore in 2023-24 from Rs 61.50 crore in 2022-2023. In 2021-2022, Rs 160.24 crore was the total budget for off-grid solar.
Off-grid solar projects cover the implementation of Phase-III of the off-grid solar Photo Voltaic program, which includes the installation of 0.3 million solar street lights, distribution of 2.5 million solar study lamps and installation of solar power packs of a total aggregated capacity of 100-megawatt power, the budget document read.
Under Atal Jyoti Yojana (AJAY) Phase-II, over three lakh solar street lights would be installed. Further 20MW Projects of Concentrated Solar Thermal will be undertaken, the document added.
“As a part of the government’s overall market borrowings in 2022-23, Sovereign Green Bonds will be issued for mobilising resources for green infrastructure,” Sitharaman said in last year’s budget.
Neha Kumar, who heads the South Asia Programme of the global not-for-profit Climate Bonds Initiative, told DTE that they are referring to the nomenclature in the Public Account of India by referring to the Sovereign Green Fund. This is the borrowing that has come from the issuance of Sovereign Green Bond.
Sovereign Green Fund demarcated to renewable energy projects and the railways this year amounted to Rs 20,013 crore.
The budget document of MNRE shows that Rs 7,534 crore was given for solar grid projects, wind grid projects, Pradhan Mantri Kisan Urja Suraksha Evam Uhan Mahabhiyan (PM-KUSUM) scheme, and the National Green Hydrogen. The rest was given to the railways.
From 2017 to September 2022, 15 Indian corporates issued green bonds worth Rs 4,539 crore, according to SEBI’s data on green debt securities. Most of these are related to renewable energy generation, the Economic Survey 2022-23 said.
The Reserve Bank of India has scheduled two auctions on January 25, 2023 and February 9, 2023, for Rs 8,000 crore each, the survey added.