Union Finance Minister Nirmala Sitharaman's Union budget for 2023-24, which focuses on 'green growth' as one of the seven major drivers is in line with the long term climate goals for 2070, say industry experts.
The FM said India is moving forward firmly for the 'panchamrit' (five climate action goals set by Prime Minister) and net-zero carbon emission by 2070 to usher in green industrial and economic transition and this Budget builds on focus on green growth. The recently launched National Green Hydrogen Mission with an outlay of ₹19,700 crore, will facilitate transition of the economy to low carbon intensity, reduce dependence on fossil fuel imports, and make the country assume technology and market leadership in this sunrise sector, she says.
The budget provided ₹35,000 crore for priority capital investments towards energy transition and net zero objectives, and energy security by the Ministry of Petroleum & Natural Gas.
"In the context of overall geopolitical and economic outlook, the outlay of Rs. 35,000 crore for energy transition and energy security is a significant step forward and we believe the Finance Minister has presented a Green Budget that demonstrates Government of India's unwavering commitment to achieving Net Zero by 2070," says Sumant Sinha, chairman and CEO, ReNew Power.
The government's commitment to increasing the use of renewable energy in the country is commendable, and will play a crucial role in reducing carbon emissions and mitigating the impact of climate change, says Girish R Tanti, vice-chairman, Suzlon Energy.
The FM announced Battery Energy Storage Systems with capacity of 4,000 MWH will be supported with Viability Gap Funding and a detailed framework for Pumped Storage Projects will also be formulated. The Inter-state transmission system for evacuation and grid integration of 13 GW renewable energy from Ladakh will be constructed with investment of ₹20,700 crore including central support of ₹8,300 crore.
For the clean energy sector, there are several welcome announcements like support for Battery Energy Storage Systems, the transmission infrastructure to evacuate power from Ladakh, the allocation for biogas to energy projects and the initiatives for scrapping of old vehicles of the central and state governments, says Sumant Sinha.
"The increase in investments in capital infrastructure, including 'Green Growth', sustainable cities and railways and transport infrastructure will give the necessary boost to the domestic economy," says Sunil Mathur, managing director and chief executive officer, Siemens India.
"The Union Budget 2023-24 is a pro-growth budget having a strong focus on green growth that will act as a key motivator for businesses to accelerate their shift towards net-zero goals and boost sustainable growth. There is a significant push to capital expenditure which will further attract private investment," says B. Santhanam, CEO Asia Pacific and India region & chairman, Saint-Gobain India. Overall, the budget will serve as the blueprint to make India self-reliant and drive long-term economic growth with ecological sustainability, he says.
"The government highlighted the Green credit Program under the Environment (Protection) Act to incentivize sustainable actions which is a net positive for the renewable energy industry," says Gautam Mohanka, managing director, Gautam Solar.
With the Government controlling a large fleet of vehicles, replacing the old and polluting ones is a fantastic move, which will provide a fillip to the auto sector and the scrapping policy will have a lot to gain, making scrapping centres significantly more viable than they were without the vehicle replacement scheme, says Manish R Sharma, Partner and Leader Capital Projects & Infrastructure, PwC India. With Rs 19,700 crore on the green hydrogen mission, the Government is keeping all the options open - from green hydrogen based vehicles to BS VI to e-mobility. All of these options stand a chance to gain from the vehicle replacement scheme and alternate fuel like biogas and hydrogen is a push towards circular economy, but it also signals e-mobility players to plan for resilience if alternate fuel and technologies come up faster, says Manish.
Budget 2023 prioritises inclusive development and green growth - a marked and welcome direction in the country's policy making - will pave the way for sustainable gains towards India @100, says Shivananda Shetty, Partner and Head, ESG, KPMG in India. Finance Minister's budget speech shows alignment of government vision to sustainable development goals and In a first, the budget seems to place green considerations as a critical driver and enabler of economic growth, he says.
"Specific budgets provided on Green Hydrogen, Energy Transition, Battery Storage Pumped Hydro, RE Evacuation from Ladakh and inclusion of Green Credit in Environment Protection Act, etc. will go a long way in decarbonising the Indian economy," says Debasish Mishra, Partner and Energy, Resources and Industrials Industry Leader, Deloitte India.
To encourage green growth, the Finance Minister also announced measures to promote green mobility, sustainability and green energy, domestic value addition in the manufacturing sector, exports and better customs administration. To encourage India's mobile handset manufacturing business, customs exemption has been extended to camera lens and other items and reduction on lithium-ion cells for another year. Customs duty on machinery required for manufacturing lithium-ion cells used in electric vehicles shall be exempted. It was also mentioned that the customs slabs shall be reduced from 21-13%.
However, the budget did not consider some of the industry demands like Production Linked Incentive (PLI) scheme for wind turbine generators and device manufacturers and electrolysers and related equipment. Another demand was for reducing import duty on electrolytes and impose Green hydrogen purchase obligations.