{"id":153292,"date":"2025-01-28T20:28:14","date_gmt":"2025-01-28T14:58:14","guid":{"rendered":"https:\/\/pwonlyias.com\/stage\/?post_type=editorial-analysis&#038;p=153292"},"modified":"2025-03-03T10:58:08","modified_gmt":"2025-03-03T05:28:08","slug":"union-budget-a-turning-point-for-climate-action","status":"publish","type":"editorial-analysis","link":"https:\/\/pwonlyias.com\/stage\/editorial-analysis\/union-budget-a-turning-point-for-climate-action","title":{"rendered":"The Union Budget As a Turning Point For Climate Action"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The Budget for<\/span><b> FY 2025-2026<\/b><span style=\"font-weight: 400;\"> should reflect the seriousness of the government in integrating climate competitiveness into India\u2019s fiscal framework.<\/span><\/p>\n<h2><span style=\"font-size: 18pt;\"><b>Expectations from Union Budget 2026<\/b><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Balancing Climate and Economic Goals: <\/b><span style=\"font-weight: 400;\">The 2026 Budget addresses the dual challenge of <\/span><b>climate change<\/b><span style=\"font-weight: 400;\"> and <\/span><b>economic resilience<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Finance Minister Nirmala Sitharaman<\/b><span style=\"font-weight: 400;\"> must prioritize climate adaptation and mitigation while fostering economic growth.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Net-Zero Target: <\/b><span style=\"font-weight: 400;\">With just five years to meet the interim <\/span><b>Net-Zero target<\/b><span style=\"font-weight: 400;\">, urgent action is required to accelerate progress toward sustainability.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Transformative Policies: <\/b><span style=\"font-weight: 400;\">The Budget has the potential to:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Safeguard vulnerable communities<\/b><span style=\"font-weight: 400;\"> from climate impacts.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Enhance India\u2019s global competitiveness<\/b><span style=\"font-weight: 400;\"> through sustainable innovations.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Fast-track sustainable development<\/b><span style=\"font-weight: 400;\"> by integrating climate resilience with economic strategies.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><span class=\"vc_button\"><a href=\"https:\/\/www.pw.live\/batches\/upsc\/pw-only-ias?utm_source=seo+upsc+batch&#038;utm_medium=seo+upsc&#038;utm_campaign=seo&#038;utm_id=upsc\" target=\"_blank\" rel=\"noopener\">Enroll now for UPSC Online Classes<\/a><\/span><\/p>\n<h2><span style=\"font-size: 18pt;\"><b>Key Government Initiatives for Renewable Energy and Sustainability<\/b><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>PM Surya Ghar Muft Bijli Yojana: It <\/b><span style=\"font-weight: 400;\">promotes solar energy adoption in residential households and enhances energy access while reducing carbon footprints.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Over <\/span><b>1.45 crore households<\/b><span style=\"font-weight: 400;\"> have registered, indicating strong public interest.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>National Green Hydrogen Mission: It <\/b><span style=\"font-weight: 400;\">positions India as a global hub for green hydrogen production. Increased allocation reflects its importance.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">It aims to decarbonize critical industries like steel, cement, and transportation.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Viability Gap Funding for Offshore Wind Energy: The government <\/b><span style=\"font-weight: 400;\">supports offshore wind energy projects to diversify renewable energy sources.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">It reduces dependency on fossil fuels and enhances long-term energy security.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Electric Vehicle (EV) Infrastructure Support <\/b><span style=\"font-weight: 400;\">Investments in EV charging infrastructure to combat range anxiety.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">It is pivotal for reducing transport sector emissions, addressing urban pollution challenges.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-size: 18pt;\"><b>Gaps in India\u2019s Climate Action Plan<\/b><\/span><\/h2>\n<ul>\n<li><b>Renewable Energy Capacity Shortfall: <\/b><span style=\"font-weight: 400;\">India\u2019s renewable energy capacity stands at <\/span><b>203.18 GW<\/b><span style=\"font-weight: 400;\">, significantly below the <\/span><b>500 GW target for 2030<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span>\n<ul>\n<li><span style=\"font-weight: 400;\">Bridging this gap requires <\/span><b>massive investment<\/b><span style=\"font-weight: 400;\">, improved <\/span><b>policy frameworks<\/b><span style=\"font-weight: 400;\">, and effective <\/span><b>implementation<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Challenges in Solar Energy Implementation<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>PM Surya Ghar Muft Bijli Yojana<\/b><span style=\"font-weight: 400;\">: Over <\/span><b>1.45 crore households<\/b><span style=\"font-weight: 400;\"> have enrolled, but only <\/span><b>6.34 lakh installations (4.37%)<\/b><span style=\"font-weight: 400;\"> have been completed.Bureaucratic inefficiencies, <\/span><b>funding shortages<\/b><span style=\"font-weight: 400;\">, and inadequate <\/span><b>monitoring mechanisms<\/b><span style=\"font-weight: 400;\"> have delayed progress.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Reliance on Imports for Solar Modules: <\/b><span style=\"font-weight: 400;\">India produces <\/span><b>only 40%<\/b><span style=\"font-weight: 400;\"> of its solar module requirements domestically. This reliance on imports raises costs and makes projects vulnerable to <\/span><b>global supply chain disruptions<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Domestic solar panels are <\/span><b>65% more expensive<\/b><span style=\"font-weight: 400;\"> than imported ones, slowing down widespread adoption.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Untapped Renewable Potential in Railways: <\/b><span style=\"font-weight: 400;\">India\u2019s vast railway network could potentially host up to <\/span><b>5 GW<\/b><span style=\"font-weight: 400;\"> of solar and wind energy.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Lack of <\/span><b>public-private partnerships<\/b><span style=\"font-weight: 400;\"> and <\/span><b>investment incentives<\/b><span style=\"font-weight: 400;\"> has kept this potential largely untapped.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Inadequate Fiscal and Policy Support: <\/b><span style=\"font-weight: 400;\">Current <\/span><b>fiscal incentives<\/b><span style=\"font-weight: 400;\"> and <\/span><b>subsidies<\/b><span style=\"font-weight: 400;\"> are not enough to overcome the challenges, particularly for low-income households.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">A broader approach to reducing <\/span><b>upfront costs<\/b><span style=\"font-weight: 400;\"> and improving <\/span><b>affordability<\/b><span style=\"font-weight: 400;\"> is essential, particularly through models like <\/span><b>RESCO<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-size: 18pt;\"><b>Transformative Policy Measures<\/b><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>International Market Challenges<\/b><span style=\"font-weight: 400;\">: India&#8217;s exports to the EU, valued at <\/span><b>$8.22 billion annually<\/b><span style=\"font-weight: 400;\">, could be affected by <\/span><b>CBAM<\/b><span style=\"font-weight: 400;\"> set to take effect in <\/span><b>2026<\/b><span style=\"font-weight: 400;\">.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">MSMEs, which contribute <\/span><b>30% of GDP<\/b><span style=\"font-weight: 400;\"> and <\/span><b>45% of exports<\/b><span style=\"font-weight: 400;\">, will face significant challenges.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Climate Action Fund<\/b><span style=\"font-weight: 400;\">: The creation of a <\/span><b>Climate Action Fund<\/b><span style=\"font-weight: 400;\"> (modeled after Japan\u2019s Green Transformation Fund) to support industrial decarbonization and enable MSMEs to comply with CBAM regulations.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Transition to Circular Economy: <\/b><span style=\"font-weight: 400;\">Adopting a <\/span><b>circular economy<\/b><span style=\"font-weight: 400;\"> could lead to potential profits of <\/span><b>\u20b940 lakh crore annually by 2050<\/b><span style=\"font-weight: 400;\"> and a <\/span><b>44% reduction<\/b><span style=\"font-weight: 400;\"> in greenhouse gas emissions.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The <\/span><b>FY26 Budget<\/b><span style=\"font-weight: 400;\"> should incentivize <\/span><b>recycling<\/b><span style=\"font-weight: 400;\"> and <\/span><b>refurbishment technologies<\/b><span style=\"font-weight: 400;\"> by offering tax deductions and accelerated depreciation.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Climate Resilience<\/b><span style=\"font-weight: 400;\">: India\u2019s vulnerability to <\/span><b>climate change<\/b><span style=\"font-weight: 400;\"> demands urgent action, especially given the decline in <\/span><b>insurance penetration<\/b> <b>(down to 3.7% in FY24)<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Tax Incentives: Tax incentives<\/b><span style=\"font-weight: 400;\"> for climate-linked insurance policies and <\/span><b>reduced GST rates<\/b><span style=\"font-weight: 400;\"> on disaster protection premiums could drive wider adoption.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Green Finance:<\/b><span style=\"font-weight: 400;\"> The Budget should also focus on <\/span><b>standardizing green finance definitions<\/b><span style=\"font-weight: 400;\"> and securing investments to meet India\u2019s <\/span><b>climate goals by 2030<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Solar Manufacturing and Resco support: <\/b><span style=\"font-weight: 400;\">By introducing <\/span><b>financial instruments<\/b><span style=\"font-weight: 400;\"> and <\/span><b>credit guarantees<\/b><span style=\"font-weight: 400;\">, the government can reduce upfront costs, making renewable energy more accessible to <\/span><b>low-income households<\/b><span style=\"font-weight: 400;\">.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Expanding <\/span><b>Production-Linked Incentives (PLIs)<\/b><span style=\"font-weight: 400;\"> across the solar supply chain will reduce costs and <\/span><b>strengthen India\u2019s manufacturing capacity<\/b><span style=\"font-weight: 400;\">, reducing reliance on imports.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-size: 18pt;\"><b>Importance of Climate-Linked Policies<\/b><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Increasing Competitiveness<\/b><span style=\"font-weight: 400;\">: Climate-linked policies are essential for <\/span><b>India\u2019s global trade and investment<\/b><span style=\"font-weight: 400;\"> positioning.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Rising Demand<\/b><span style=\"font-weight: 400;\">: The demand for <\/span><b>low-carbon goods<\/b><span style=\"font-weight: 400;\"> and the alignment of <\/span><b>capital markets<\/b><span style=\"font-weight: 400;\"> with sustainability requires urgent action.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Fiscal Integration<\/b><span style=\"font-weight: 400;\">: It is crucial to integrate <\/span><b>climate competitiveness<\/b><span style=\"font-weight: 400;\"> into India\u2019s fiscal framework to remain competitive.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: center;\"><span class=\"vc_button\"><a href=\"https:\/\/store.pw.live\/govt-entrance-exams\/upsc-books\/upsc-textbooks?utm_source=SEO&#038;utm_medium=PW+Live&#038;utm_campaign=UPSC+Textbooks\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Check Out UPSC NCERT Textbooks From PW Store<\/span><\/a><\/span><\/p>\n<h2><span style=\"font-size: 18pt;\"><b>Conclusion<\/b><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">By addressing gaps in <\/span><b>renewable energy implementation, <\/b><span style=\"font-weight: 400;\">protecting export competitiveness, fostering a circular economy, and enhancing climate resilience, the government can lay the <\/span><b>foundation for a sustainable and thriving future.<\/b><\/p>\n<table style=\"width: 99.8983%;\">\n<tbody>\n<tr>\n<th style=\"width: 100%; border-style: solid; border-color: #000000; background-color: rgba(184, 165, 217, 0.53); text-align: left; vertical-align: middle;\"><span style=\"color: #000000;\"><b>Mains Practice Question:<\/b><\/span><\/p>\n<p><span style=\"color: #000000;\"><a style=\"color: #000000;\" href=\"https:\/\/pwonlyias.com\/stage\/mains-answer-writing\/the-green-energy-transition-and-bridge-implementation-gaps-in-schemes-like-pm-surya-ghar-muft-bijlee-yojana\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Q. Discuss the role of the Union Budget in fostering sustainable economic growth while addressing India&#8217;s climate commitments. How can fiscal policy interventions help accelerate the green energy transition and bridge implementation gaps in schemes like PM Surya Ghar Muft Bijlee Yojana? 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