If the just-published economic review is an indicator, the budget of 2025-26 may place significant emphasis on the adaptation finance linked to climate change, a senior ecological economist of the country told Down To Earth (DTE).
This would be a welcome change to the climate experts who have often criticised the government for emphasising mainly on mitigation modes so far to combat climbing climate impacts.
The action will be a turnaround from India’s focus on mitigation till the 29th Conference of Parties (COP29) to the United Nations Framework Convention on Climate Change. Incidentally at COP29, India strongly criticised the over emphasis on mitigation by developed countries, a first-of-its-kind posturing in favour of adaptation finance during a global climate summit.
Experts feel that, alongside adaptation, the budget will try to balance on mitigation by investing in the development of electrical vehicle (EV) infrastructure in the country; especially charging infrastructure; keeping in mind meeting the Indian government-set target of 30 per cent EV sales by 2030, a campaign called EV30@30.
The budget is expected to continue with the ongoing trend of supporting solar, while it remains unclear whether the government will choose to go big on contentious issue like river interlinking.
“The economic review published today, in a rarest manner, has acknowledged the bias against adaptation finance so far; and accepted that it can play a key role to develop the Indian economy. I expect that the ensuing budget will pass a clear mandate on drafting the adaptation finance taxonomy for India,” pointed out Nilanjan Ghosh, an ecologist-economist and head of the Kolkata chapter of think-tank Observer Research Foundation (ORF).
“A strong adaptation strategy is a priority for the country, given its significant vulnerability to climate change, stemming from its geographic and agro-climatic diversity,” reads the Economic Survey report.
The report claimed that “climate action (in India), so far, has been financed through domestic resources, with the public sector playing a central role” and alleged that “the international flow of funds for climate actions is highly inadequate and has a mitigation bias”.
Dhruba Purkayastha, a director in energy think-tank CEEW said, “India is well-positioned to achieve its Nationally Determined Contribution targets before 2030. The Economic Survey’s emphasis on shifting public policy focus toward climate adaptation is both timely and contextually relevant.”
“It is a welcome shift of policy. Though the Indian government has been talking about the adaptation finance in few international parleys; never before it has been so categorical about it in the economic review; we expect the shift to be reflected in the budget as well; which is expected to bring hope to the vulnerable areas like Sundarbans; Assam; Bihar; Uttarakhand and likewise,” stated a climate expert.
“Apart from emphasis on adaptation, I am also expecting more capital expenditure on issues like EV infrastructure and early warning systems, mainly in the vulnerable regions of Northeast and coastal India,” added Ghosh. The expert also pointed out that agriculture, a sector termed as ‘the sector of the future’ in the Economic Survey, would be made less resource-intensive than has been traditionally promoted by the Green Revolution.
“I am expecting lot of focus on the EV sector considering my experience in the auto fair in Delhi where so many EV vehicles were on the show, indicating that the market is getting warmer to the new technology,” stated Sanjay Vashist, director, Climate Action Network South Asia (CANSA) to this correspondent.
Disha Aggarwal, another climate expert from CEEW pointed out that “ …we need to go much beyond the current rate of RE (renewable energy) deployment. India has the potential to scale its solar and wind capacity to 1500 GW, which is 10 times the current installed base.” She explained that to reach this level, the Centre and states must take concerted actions to overcome challenges related to land procurement, timely availability of evacuation infrastructure and supply chains.
Nakul Sharma, a climate expert with CANSA said while India aims to reach a target of 50 per cent non-fossil fuels by 2030, the growth in RE capacity is too slow to meet the goal of 500 GW.
“India needs to add at least 50 GW of new capacity annually until 2030. The Budget 2025 should encourage competition among State Renewable Energy Agencies by offering incentives for prompt land allocation, power evacuation infrastructure, and environmental clearances for large projects,” said Sharma.
The expert further reminded that “the budget should leverage public interest in the PM Har Ghar Surya Sobhagya Yojana 2024 and work with banks to enhance small-scale solar loan allocations while increasing capacity and competition”.
Experts have kept their fingers crossed in terms of allocation funds to river interlinking projects, a pet project of the present government, which has received widespread criticism from environmentalists and experts, including many within the ruling dispensation.