Climate Budget Keeps Swinging, Always Falls Short

Inadequate allocations for efforts to protect the environment and use renewable energy are perennial issues. However, there is no dispute that environmental measures need significant allocations at this juncture. Once again, the Union Budget for 2022-23 has fallen short on both effort and allocation for the environment, and it will have adverse consequences.

Firstly, India needs to advance several important initiatives in keeping with its international and national commitments for a healthier and cleaner environment. Secondly, some drastic cuts were instituted in earlier allocations due to the COVID-19 pandemic, and there is a compelling need to make up for these.

In March 2021, the Parliamentary Standing Committee of the Ministry of Environment, Forests and Climate Change reported a 35% reduction in the allocations for 2020-21 during the presentation of Revised Estimates. The government reduced funds in all proposed activities mentioned in the annual plan of schemes. It said the estimates for that year were the lowest in the last three years. The funds allocated for research and development on conservation and development were, for instance, much lower than in the three previous years. The utilisation was also low, at just 16.3%, 35.8% and 23.5% in those three years.

In 2020-21 an allocation of Rs. 40 crore was made for the Climate Change Action Plan, which got reduced to Rs. 24 crores later in the year. Meanwhile, the government also cut the National Adaptation Fund for Climate Change allocation from Rs. 80 crore to Rs. 44 crore. These were allocated Rs. 30 crore and Rs. 60 crore in the next year.
In 2021-22, the Budget Estimate was retained at Rs. 2,863 crore for the Ministry of Environment without attempting to cover the cuts of the past year. Similarly, an allocation of Rs. 5,646 crore was retained for the Ministry of New and Renewable Energy in 2020-21 despite significant cuts in the year before.
The Centre for Budget and Governance Accountability has estimated that the government cut the central grants for the Ministry of Renewable Energy in 2020-21 from Rs. 5,646 crore to Rs. 3,343 crore in the Revised Estimate. This reduction signals a dismal situation, considering in 2016-17, the actual expenditure under this category was Rs. 7,476 crore.
Besides grants from the government, the Ministry of New and Renewable Energy depends on internal and extra-budgetary resources. These primarily include the profits, loans and equity raised by public sector undertakings, which have recently increased. However, we are more concerned with the budgetary resources in central schemes—these have risen very modestly, to Rs. 6,788 crore, and constrained by previous cuts that hinder the completion of projects.
For grid-interactive renewable energy, the 2020-21 budget estimate of Rs. 4,350 crore was reduced to Rs. 2689 crore, while the reduction was from Rs. 1,184 crore to Rs. 558 crore for off-grid renewable energy. Further, the original allocation in 2021-21 for solar grid-connected energy was Rs. 2,150 crore. In the revised estimate, the Centre slashed it to Rs. 1,254 crore, then raised to Rs. 2,369 crore in the budget estimate of 2021-22.

In recent years, there has been a hope that the Ministry of New and Renewable Energy will launch a scheme to promote the Mangal Turbine. Invented by farmer-scientist Mangal Singh, it uses flowing water energy to lift water from streams and canals for irrigation and drinking water. Regretfully, though the Maithani Committee appointed by the Rural Development Ministry provided a plan to promote the turbine, it has got no allocation. With some modifications, it can help with crop processing and cottage industries and has great potential to reduce greenhouse gas emissions and energy costs.

Similarly, the government has discussed the Green Energy Corridor Project a lot, but in 2020-21, the allocation of Rs. 300 crore for it was reduced to Rs. 160 crore or by almost half. In 2018-19, the actual expenditure was Rs. 500 crore, demonstrating the declining trend in funding this idea. Regarding energy conservation and energy efficiency programs of the Bureau of Energy Efficiency Rs. 213 crore was allocated in 2020-21, which was cut later to Rs. 93 crore.
Hence, we see the trend of significant falls in crucial schemes, programs and initiatives during 2020-21, followed by attempts to raise allocations, which brought the funding to more or less the previous levels in the financial year 2021-22. These swings in grants do not help us learn exactly how much of the 2020-21 cuts were subsequently made up. It seems likely that India is lagging in allocations for energy conservation and management.
There is a clear need for significant increases to these programs. However, the Ministry of Environment, Forests and Climate Change has seen only a minor rise in its funding to Rs. 3,030 crore. In particular, the insignificant allocation for adaptation to climate change, an essential aspect of climate change actions, is disappointing. In the previous year, the Budget Estimate for the National Adaptation Fund was Rs. 60 crores, although the actual expenditure was just Rs. 44 crore. For 2022-23 Rs. 60 crore has been allocated again, indicating stagnation at a low level of its budget. In the case of the Climate Change Action Plan, the allocation last year was Rs. 30 crores, while expenditure was only Rs. 20 crore. The 2022-23 budget has been maintained at Rs. 30 crores.
Coming to the Ministry of New and Renewable Energy, the allocation for on-grid solar power has been increased, but for off-grid solar power, the Rs. 237 crore allocated in the previous year has been reduced. Now it is just Rs. 62 crores in 2022-23. This massive cut comes on top of last year’s reductions in the Revised Estimate. In the Revised Estimate, the Green Energy Corridors got half their allocation in 2021-22, at Rs. 150 crores.

In the case of grid-connected bioenergy, Rs. 120 crore was allocated in 2021-22, which was brought to Rs. 57 crore in the Revised Estimate. And, in 2022-23, only Rs. 50 crore has been given. Off-grid bioenergy got Rs.70 crore last year, and cut to Rs. 36 crore later in the year. This year, it has only been given Rs. 20 crore. Research, development and international cooperation on renewal energy got Rs. 75 crore last year, which was cut to Rs. 28 crores. And in 2022-23, it has been allotted Rs. 35 crore.

Energy conservation and efficiency (under the Bureau of Energy Efficiency) was allocated Rs. 80 crore in 2020-21, which was reduced to Rs. 40 crore 2021-22. Now, in Budget 2022-23, it has been allocated Rs. 60 crore. The sustainable cities programme under the Ministry of Housing and Urban Development called City Investments to Innovate, Integrate and Sustain had its budget cut from Rs. 332 crore to Rs. 141 crore in 2021-22.
The allocations are inadequate considering the needs, and many heads of expenditure show signs of stagnation, if not cuts over the years. Surely environmental concerns deserve more as the world grapples with an ecological crisis.
The writer is honorary convener, Campaign to Save Earth Now. His recent books include Protecting Earth for Children and Planet in Peril. The views are personal.