Green growth: Budget numbers don't add up

Green growth is one of the budget’s top priorities for 2023, with the long-term goal of reaching net zero carbon emissions in India by 2070. Green found prominence in the speech by the finance minister when she announced that “we are implementing many programmes for green fuel, green energy, green farming, green mobility, green buildings, and green equipment, as well as policies for efficient use of energy across various economic sectors.” Envisioning a green economy is particularly relevant in the backdrop of global attention to climate action and sustainability in recent conferences such as the G20 Summit, COP27, and the World Economic Forum. However, the green quotient of the budget needs to be located within the broader canvas of the entire budgetary allocation and the overall economic intent.

First, the Centre announced a substantial increase in capital expenditure (capex) outlay for 2023–24 in infrastructure with a total target of Rs 10 lakh crore, a 35.4% increase from the budget estimate for fiscal 2022, marking the highest ever allocation for railways. The Centre has already identified 100 critical transport infrastructure projects and 50 additional airports, among other mega projects, for implementation.

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While the output and growth narratives are clear, the increase in capex also signals increasing pressure on the environment. This is not to push degrowth as a policy agenda but to carefully assess the ecological precautions and social costs, which are elusive in the design and implementation of many development projects.

The recent events at Joshimath is a case in point. Ecologists and hydrologists point out that the 12-km-long tunnel as part of the Tapovan-Vishnugad Hydroelectric Project constructed on the Dhauli Ganga river in Chamoli District by NTPC significantly contributed to the tragedy. The lack of planning or poorly planned tourism infrastructure in the Hindu Kush Himalayan region was also clearly highlighted in a study, The Hindu Kush Himalaya Assessment (2019), by the International Centre for Integrated Mountain Development (ICIMOD). The Joshimath subsidence in Uttarakhand is indicative of a much larger and looming crisis, not only in the Hindu Kush Himalayan region but across the country, where unrestrained tourism, commercial activities, and development projects place tremendous pressure on ecologically sensitive environments.

Second, the ease of doing business is synonymous with fast-tracking environmental clearance, and this represents a very myopic view of any perceived delay in project reviews because any oversight can result in severe ecological damages and the loss of lives. In her budget speech, the finance minister stated that “to improve the ease of doing business, more than 39,000 compliances have been reduced and more than 3,400 legal provisions have been decriminalized.” Furthermore, the Jan Vishwas Bill 2022, which amends 42 Central Acts, is now being introduced to ease compliance requirements for individuals and businesses. The bill included the Environment (Protection) Act, 1986, and the Air (Prevention and Control of Pollution) Act, 1981, among others, which lead to the ease of operating industrial plants in an air pollution control area that was previously prohibited.

This budget proposes a series of measures to unleash the economic potential of the country, but the environmental consequences of dilution of environmental law and policy for easier business are inevitable. The Centre should critically review the impact on the environment, especially that coming from mega-development and infrastructural projects, while fostering the ease of doing business.

Third, there are interesting temporal contradictions in this budget regarding climate action. Climate mitigation policies are important, and the current budget heavily favours them, but it fails to account for funding climate adaptation efforts, despite the fact that the effects of climate change have become more frequent and intense. While it is admirable to aim for net zero emissions by 2070, there is insufficient focus on dealing with the immediate effects of climate change. There are no budgetary allocations for crucial programmes such as the Climate Change Action Plan, the National Adaptation Fund for Climate Change, and the National Mission on Himalayan Studies, all of which have a direct bearing on the climate crisis.

Similarly, the Climate Resilient Agriculture Initiative, a scheme under the Ministry of Agriculture and Farmers Welfare that has received no funding, will have an impact on the agrarian economy’s resilience. The Centre should have targeted more spending on climate adaptation actions.

(The writer teaches economics at Azim Premji University.)