Finance Minister largely ignored environmental challenges in the budget
In the last few months, the environmental status of the country has been in the news for all the wrong reasons. Delhi’s air pollution became an international incident when Sri Lankan cricketers wore face masks during the third Test against India at the Feroz Shah Kotla Stadium. Some of the players vomited on the ground due to noxious smog.
At the World Economic Forum meet in Davos, Switzerland, where Prime Minister Modi gave the opening address, a report on the environmental performance index of countries published by the Yale and Columbia Universities, ranked India as 177th out of the 180 countries. Only Burundi, Bangladesh and Congo were found worse than India.
Lastly, the Economic Survey 2018 found that climate change is now hurting Indian agriculture and farmers considerably. The survey found that the effect of extreme temperature shocks on productivity in un-irrigated areas, which account for more than half of our agricultural land, is significant. An extreme temperature shock in unirrigated areas reduces yields by 7 per cent for Kharif and 7.6 per cent for Rabi. Similarly, extreme rainfall shocks lead to 14.7 per cent and 8.6 per cent reduction in yield for Kharif and Rabi, respectively. These losses could rise significantly in the coming years as the warming level reaches 1.5 degrees Celsius in the next 10 years.
With the country in the throes of an impending crisis, one was hoping that the Finance Ministry Arun Jaitley would give due recognition to the environmental challenges in his last full budget before the general elections next year. Alas, it was a damp squib.
Environment issues were largely ignored in the budget. Except for tackling the issue of air pollution due to crop burning in Delhi-NCR region, there was little mention of anything else. For air pollution in Delhi-NCR, the finance minister announced a special scheme to subsidise machinery required for in-situ management of crop residues. But crop burning is not restricted to only Delhi-NCR and the surrounding states; it is happening in large parts of the country. Similarly, air pollution is a pan-India issue. Most cities do not meet the ambient air quality standards. A national action plan to combat air pollution backed with significant budgetary allocation would have been an appropriate response to the challenge.
The budget is completely silent on climate change. In fact, the budget for the climate change action plan and the adaptation fund has more or less remained the same as the last year at about Rs 150 crore. The low budget for climate change indicates lack of ideas to address this issue.
The budget is also silent on various environmental cesses. Due to the implementation of the goods and services tax (GST), all environment-related taxes have been withdrawn. The National Clean Energy Fund, financed through a cess on coal consumption, has been diverted to compensate states for losses incurred due to GST. The water cess, which charged industries for water consumption, was withdrawn. The water cess was the major source of funds for the state pollution control boards to monitor and control pollution. In the budget there is no mention of how these cesses would be replaced or compensated. This budget, therefore, is unique; it has actually taken away money from clean energy and environmental protection instead of investing in them.
In his speech, Mr. Jaitley mentioned that the government is focused on 'Ease of Living'. He defined ‘Ease of living’ as providing water, roads, electricity, Wi-Fi, and building Smart Cities. He has put huge money behind these schemes. But ‘Ease of Living’ is not only about infrastructure; it is also about a clean and healthy environment. Mr. Jaitley lives in Delhi but conveniently forgot this point.
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