The union budget has something for every sector. Likewise, the government announced the creation of a thematic fund for sunrise sectors. The supportive policy actions will help provide funding for these important future sectors. Budget 2022-23 has been termed as a 'booster budget' due to its various initiatives to increase corporate activity and infrastructure development including climate and renewable energy in the country.
The budget highlighted climate action was as one of the pillar of the Budget, alongside PM Gati Shakti's infrastructure masterplan, energy transformation, and inclusive development. FM Sitaraman made many references to 'clean energy,' stating that we need "mindful utilization rather than thoughtless consumption."
Currently, India is vulnerable to climate change and also facing challenges to lift millions of people out of poverty. India's Union Budget 2022-23 should ideally reflect government spending that expands the social safety net and plans for low-carbon, climate-resilient development.
In her Budget speech, Sitharaman said that India will issue sovereign green bonds (SGB) to support green projects in the country. reen bonds are financial instruments that vary from traditional fixed-income securities only in that the issuer promises to utilize the profits to support initiatives that will have a beneficial environmental or climatic impact. The green bond market has been steadily expanding since its inception in 2007.
She explained the funds will be utilized for projects that will assist lower the economy's carbon intensity. SGB will be included in the government's borrowing program in fiscal year -2022-23. Market borrowing through green bonds for mobilizing resources for green infrastructure is also a welcome step.
The move by the government towards climate and renewable energy is could offer a significant boost to India's strong efforts to transition to a low-carbon economy, with lofty goals such as generating a robust 175 gigatonne of renewable energy capacity by 2022. Such goals need huge investment and the SGB announced in the budget could offer a boost to the investments.