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RM Reports

Budget 2018 and climate change: Too Little, Too late?

Akhilesh K Prasad
While the Economic Survey 2017-18 lay emphases on the impact of climate change on the energy and the agricultural sector, the Union Budget 2018-19 presented two days later did not have much in it for the environment. The budgetary allocation for the Ministry of Environment, Forest and Climate Change (MOEFCC) was increased by a mere 4.5% for 2018-19 compared with 19% previous financial year.

The budgetary allocation for the Ministry of Renewal Energy (MNRE) which deals with the solar and wind power sector was increased by a paltry 9% for the financial year in comparison with 37% and 52% in the last two fiscals. To put things into perspective, this comes a week after the Environmental Performance Index released by the World Economic Forum ranked India 177 out of 180 nations.

The government had earlier provided incentives for renewable energy, such as 80% accelerated depreciation and tax holidays, which were withdrawn last year. Consequently, there was a slowdown in investment in the sector. Given the unsatisfactory budgetary allotment for renewable energy, it appears that the government is unlikely to achieve its target of increasing capacity of renewable energy to 175 GW by 2022.

In this context, it is important to note that 60% of the electricity produced in India is by burning fossil fuels such as coal. This is directly responsible for the alarming Green House Gas (GHG) emissions that have in turn increased the severity of heat waves in the summers throughout the northern plains, simultaneously effecting unpredictable changes in weather patterns.

Regarding the Clean Ganga Mission, the Finance Minister in his budget speech stated that work had gathered momentum. 187 projects had been approved for infrastructure development and river surface cleaning and 4,000 villages on the river bank had been declared open defecation free.

The Clean Ganga mission however, has come under criticism from various quarters. It has been reported that the only projects that have been approved are those that can bring investments, such as sewage treatment plants and sewage lines. The technologies used herein are the same that have not worked in the past. Moreover, the government has focused more on riverfront development, investment in waterways, and other such ornamental projects. The government has also announced groundwater irrigation schemes without focussing on water recharge.

The budgetary allocation for the National River Conservation Programme was increased only marginally by 6.5% over the previous year. That is, from Rs. 7.23 billion in FY 2017-18 to Rs. 7.70 billion in FY 2018-19. The funding for the Clean Ganga project remained the same as the previous year at Rs. 23 billion. Accounting for expected inflation at about 5%, the allocation appears to be disappointing.

On the issue of air-pollution, the Finance Minister expressed concern only about the NCR region and announced that a special scheme will be implemented to subsidise machinery required for management of crop residue.

India is still an agriculture-dependent economy. According to estimates of the Economic Survey, if actions are not taken earnestly and urgently, farmer income will see a decline of about 25% by 2022. Going by the current state of affairs, it appears that the government is doing too little, too late.

FDIAn MBA by qualification, Akhilesh has dabbled into various businesses. He is a keen debater, data miner and analytically inclined. His blogs tend to present a fresh perspective on any given matter.

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