RU-49-02-0064-250222/FACTSHEET

Budget Series #8

India geared for Energy Transition and Climate Action

Union Budget 2022-23 provides roadmap for clean energy and climate mitigation – a
development priority for the next 25 years

(Ministry of Environment, Forests and Climate Change

&
Ministry of New and Renewable Energy)
February 25, 2022

“Environment and sustainable development have been key focus areas for me all through my
20 years in office, first in Gujarat and now at the national level.”
- Prime Minister Narendra Modi

India has time and again shown its commitment to environmental stewardship, climate action
and focus on renewables to decarbonise the way the country operates. Prime Minister, Narendra
Modi, as a part of the national statement delivered at the 26th Conference of the Parties (COP
26) in Glasgow in November 2021, announced five bold and ambitious targets to be achieved
to enable further reduction in emissions. The landmark net-zero commitment by 2070 was
among the five new climate change targets announced by the Prime Minister. Net-zero means
removing as many emissions of carbon dioxide from the atmosphere as produced.

India’s four other commitments — all by 2030 are:

• Increasing non-fossil energy capacity to

500 Gigawatts (GWs),
• Fulfilling 50 per cent of energy
requirements from renewable sources,
• Reducing carbon intensity of economy
by 45 per cent, and
• Reducing total projected carbon
emissions by One billion tonnes.

The need to start the one-word movement

‘LIFE’ which means ‘Lifestyle For
 Environment’, urging mindful and deliberate utilization instead of mindless and destructive
consumption, has also been underlined several times.

The provisions relating to climate in the Union Budget 2022-23 are a reflection of India’s
commitment to achieve the target of net-zero carbon emissions by 2070.

The Union Finance Minister, Nirmala Sitharaman in her Budget speech said “The risks of
climate change are the strongest negative externalities that affect India and other countries.”
She reiterated the low carbon development strategy, announced by the Prime Minister, as an
important reflection of Government of India’s strong commitment towards sustainable
development.

Holistic approach cutting across Ministries:

Since no single ministry is responsible for moving India towards net zero, the Environment,
Forest and Climate Change (MoEFCC), Ministry of New and Renewable energy (MNRE), and
Ministry of Heavy Industries (which implements the Faster Adoption and Manufacturing of
Hybrid & Electric Vehicles in India (FAME INDIA) scheme to promote electric vehicles),
have largely been the driving force behind India's effort in this direction.

Budget 2022 Allocations for Environment, Renewable Energy and Electric-mobility

projects:

• The Ministry of Environment, Forests and Climate Change received a total

allocation of Rs 3030 crorei, as compared to last year’s Rs 2869.93 crores.
 o National Mission for Green India has been allocated Rs 361.69 crores this
yearii up from Rs 290 crores in the last financial year, an increase of 24.72 per
cent.

o The National Afforestation Programme has been allocated Rs 300 crores,

compared to last year’s amount of Rs 235 crores, i.e., an increase of 27.65 per
cent.

o Climate Change Action Plan has been allocated Rs 30 crores, same as last
year.

o Of the Rs 3030 crores allocated to MoEFCC, Rs 460 crores has been allotted
towards control of pollution which is a sizeable amount.

• Major Boost to Electric Vehicle scheme of the Ministry of Heavy Industries

Known as FAME-India (Faster Adoption and Manufacturing of (Hybrid and) Electric

Vehicle in India), the Scheme received a big boost from Rs 800 crores last year to Rs
2,908 crores this yeariii.

Government had approved Phase-II of FAME Scheme with an outlay of INR 10,000
Crore for a period of five years commencing from 1st April 2019. This phase aims to
generate demand by way of supporting 7,090 e-buses, five lakh e-Three wheelers,
55,000 e-Four-wheeler passenger cars (including strong hybrid) and 10 lakh e-Two
wheelers. Permit requirement for electric vehicles has also been removed. As of
February 11, 2022 there are 966,363 electric vehicles presently on road across the
country. GST on electric vehicles has also been reduced from 12% to 5%; GST on
chargers/ charging stations for electric vehicles also reduced from 18% to 5%.

*There was no such scheme for electric vehicles prior to April 2015

• Ministry of New and Renewable Energy (MNRE) being responsible for overseeing
India’s ambitious renewable energy targets was allocated Rs 6,900.68 croresiv.
To achieve the target of producing 280 GW of installed solar capacity by 2030, the solar
energy sector including both grid-interactive and off-grid projects received the highest
allocation in the MNRE. It has been allocated Rs. 3365 crores compared to last year’s Rs.
2606 crores, a 29 per cent increase.

o Solar Power (Grid) – Rs. 3304.03 crores

o Solar Power (Off-Grid) – Rs. 61.50 crores
o PM-KUSUM – Rs. 1715.90 crores
o Other Renewable Energy Applications – Rs. 0.10 crores
o Others – Rs. 124.36 crores

Propelling Green India - announcements in Union Budget 2022:

• In order to facilitate domestic manufacturing of 280 GW of installed solar capacity by

2030, an additional allocation of Rs. 19,500 Crores has been proposed for Production
Linked Incentives (PLI)v for manufacturing of high-efficiency modules with priority to
fully integrate manufacturing units from polysilicon to solar PV modules.

• A proposal to co-fire 5-7 per cent biomass pellets in thermal power plants, resulting in
estimated carbon dioxide (CO2) reduction of 38 million tonnes annually, will help to
provide extra source of income to farmers, increase job opportunities for the locals and
prevent stubble burning in agricultural fields.

• Energy efficiency and savings promoted for large commercial buildings through the
energy service company model, via capacity-building and awareness about energy
audits.

• Four pilot projects proposed for coal gasification and conversion of coal into chemicals.

• Focus on agro-forestry and private forestry; support to farmers belonging to

Scheduled Castes / Scheduled Tribes who want to take up agro-forestry.

• As part of the government’s overall market borrowings in 2022-23, sovereign Green

Bonds will be issued for mobilizing resources for green infrastructurevi. The proceeds
will be deployed in public sector projects which help in reducing the carbon intensity
of the economy.
 • Blended finance (with the government’s share limited to 20 per cent) to be promoted
for climate action, agriculture and other clean technology; this will be managed by
private fund managers.

• Inclusion of energy storage in the harmonized list of infrastructure.

• Promoting transit-oriented development for cities.

• Use of public transport in urban areas will be promoted.

• In a push for electric vehicle (EV) adoption, a battery swapping policy along with
inter-operability standards to improve efficiency in the EV ecosystem was
announced. This will allow drivers to replace depleted battery blocks for freshly
charged ones at swap stations, a faster option than charging stations. It also incentivizes
the private sector to develop sustainable and innovative business models for ‘Battery or
Energy as a Service.’

• Additionally, the Budget Session was expected to discuss a new bill — The Energy
Conservation (Amendment) Bill, 2022vii — which aims “to provide regulatory
framework for:
o Carbon Trading in India,
o Encouraging penetration of renewable in energy mix,
o Effective implementation and enforcement of the Energy Conservation Act,
2001.

Recent Developments - India’s commitment to Green Energy Future:

India is steadily boosting its green energy production capacity through wind, solar and hydro
projects, in addition to reducing its dependence on fossil fuels. Furthermore, the work on 100%
electrification of Railways is also progressing at a fast pace as Indian Railways has set a target
of becoming Net Zero Carbon Emitter by 2030. The country is also emphasizing on Mission
Circular Economy and India’s Vehicle Scrap Policy is a case in point. The Union Cabinet’s
fresh equity injection of Rs 1,500 crore into IREDA to bolster its lending capacity demonstrates
the government’s commitment to helping local bodies achieve the country’s 450 GW
renewable energy targets.
India’s total forest and tree cover increased by 2261 Sq. km in the last two years reflecting
India’s focus on environmental conservation. Mentioned below are some of the recent
initiatives and developments of Govt. of India to enable seamless energy transition and
affirmative climate action:
• Global initiatives spearheaded by India to
tackle climate change include the
International Solar Alliance (ISA),Coalition
for Disaster Resilient Infrastructure (CDRI)
and Leadership Group for Industry
Transition (LeadIT Group)viii. LeadIT Group
is one of the nine action tracks identified by
the UN Secretary-General to boost climate
ambitions and actions to implement the Paris
Agreement.

• PM Modi inaugurated the

ICRISAT’s Climate Change Research
Facility on Plant Protection and Rapid
Generation Advancement Facility on
February 5, 2022ix.

• On August 15, 2021, Hon’ble

Prime Minister launched the National
Hydrogen Mission on India’s 75th
Independence Day. The Mission aims to aid the government in meeting its climate
targets and making India a green hydrogen hub. This will help in meeting the target
of production of 5 million tonnes of green hydrogen by 2030 and the related
development of renewable energy capacity. Hydrogen and Ammonia are envisaged
to be the future fuels to replace fossil fuels. Production of these fuels by using power
from renewable energy, termed as green hydrogen and green ammonia, is one of the
major requirements towards environmentally sustainable energy security of the nation.

“Of every effort being made by India today the thing that is going to help India with a
quantum leap in terms of climate is
the field of Green Hydrogen. To
achieve the goal of Green
Hydrogen, I am announcing the
National Hydrogen Mission today
with this tricolor as a witness. We
have to make India a global hub for
Green Hydrogen production and
export in the Amrit Kaal,” the
Prime Minister said in his
Independence Day speech.
Government of India is taking
various measures to facilitate the
 transition from fossil fuel / fossil fuel-based feed stocks to green hydrogen / green
ammonia. The notification of this policy is one of the major steps in this endeavor.

On June 5, 2021, PM announced the target of 20 per cent ethanol blending in petrol
by 2025. The ambitious target, which brings forward the blending target from 2030 to
2025, is a key element of the economy-wide energy transformation. As of September
2021, the country has already reached 8.5 per cent ethanol blending and is on track to
achieve the 20 per cent target by 2025 as per Economic Survey 2021. Considerable
benefits can accrue to the country by ethanol blending, such as saving USD Four billion
foreign exchange per year in imports, enhancing energy security, lowering carbon
emissions, improving air quality, promoting productive use of damaged food grains and
waste, increasing farmers’ incomes, creating employment and investment
opportunities.

FOCUS ON RENEWABLE ENERGY

• In January 2022, the government approved an investment of Rs 1,500 crores in the

Indian Renewable Energy Development Agency (IREDA)x, which provides project
financing to the Renewable Energy (RE) sector. This equity infusion will help in
employment generation of approximately 10200 jobs/year and CO2 equivalent emission
reduction of approximately 7.49 million Tonnes CO2/year

• The government also approved the Intra-State Transmission System – Green Energy
Corridor Phase-II for laying infrastructure for connecting electricity generated from
renewables with the power grid in seven statesxi.The corridor scheme, with a total
estimated cost of Rs 12,031 crores, would receive 33 per cent central financial
assistance, or Rs 3,970 crores. The scheme will help in achieving the target of 450 GW
installed RE capacity by 2030.

• As on December 31, 2021, solar power capacity of 49.35 Gigawatts (GWs) has been
installed in the country, 36 GW solar energy capacity is under installation, and an
additional 19 GW capacity was tendered as per the Economic Survey 2021xii through
the initiatives mentioned below:
 ➢ Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM)
Scheme launched in 2019 to provide energy and water security, de-dieselise the
farm sector and generate additional income for farmers by producing solar power.
The scheme aims to add 30.8 GW of solar capacity with central financial support
of over Rs. 34,000 Crores. It has three components:

1. Installation of 10,000 MW of decentralized grid connected solar power

plants each of capacity up to 2 MW,
2. Setting up of 20 lakh standalone solar powered agriculture pumps, and
3. Solarisation of 15 Lakh existing grid-connected agriculture pumps.

RBI has included these components under Priority Sector Lending Guidelines for
easing availability of finance. As on 31 December, 2021 over 77000 stand-alone
solar pumps, 25.25 MW capacity solar power plants and over 1026 pumps were
solarised under individual pump solarisation variant.1

➢ To facilitate large scale grid connected solar power projects, a scheme for
“Development of Solar Parks and Ultra Mega Solar Power Projects” is under
implementation with a target capacity of 40 GW capacity by March 2024. So far,
50 solar parks have been sanctioned with a combined capacity of 33.82 GW in 14
states. Solar power projects of an aggregate capacity of around 9.2 GW have already
been commissioned in these parks.

➢ Roof Top Solar programme Phase-II for accelerated deployment of solar roof top
systems, with a target of 40 GW installed capacity by December 2022, is also under
implementation. So far, a cumulative 5.87 GW capacity of solar roof top projects
have been set up in the country.

➢ A scheme for setting up 12 GW Grid-Connected Solar PV Power Projects by

government entities (including Central Public Sector Undertakings) is under
implementation. Viability Gap Funding support is provided under this scheme.
Under this scheme, Government has so far sanctioned around 8.2 GW of projects.

➢ Phase-III of the Off-Grid Solar PV Applications Programme for Solar Street Lights,
Solar Study Lamps and Solar Power Packs was available till 31.03.2021. Till
December 2021 over 1.45 lakh solar street lights were installed, 9.14 lakh solar
study lamps were distributed and about 2.5 MW solar power packs were set-up as
reported by State Nodal agencies.

• Government of India has notified the offshore Wind Energy Policy in October 2015 to
harness the potential of offshore wind energy along India’s coastline. Ministry of New
and Renewable Energy is developing strategy and roadmap for installation of offshore
wind projects off the coast of Gujarat and Tamil Nadu. The Ministry has notified the
wind solar hybrid policy, providing a framework for promotion of large grid connected
wind-solar PV hybrid projects for optimal and efficient utilization of transmission
infrastructure and land, reducing the variability in renewable power generation and
achieving better grid stability.

1
https://www.indiabudget.gov.in/economicsurvey/doc/eschapter/echap06.pdf
INDIAN RAILWAYS GOES GREEN

• Major initiatives undertaken for reduction of carbon emissions include 100 per cent
electrification of its network by December 2023, use of three-phase technology for
regenerative braking, “head on generation” technology eliminating the need for
separate diesel fueled power cars, use of renewable energy source (133.26 MW solar
and 103 MW wind installed capacity).2

• Provisioning of LED lights at all railway installations, and creation of additional carbon
sink by afforestation.

• Figure shows the expected CO2 emission reduction by Indian Railways through use of
renewable energy

• Indian Railways (IR) is working in mission mode to become the largest Green Railways
in the world and is moving towards becoming a “net zero carbon emitter” before 2030.
Mission MODE: Indian Railways has set a target of Net Zero Carbon Emission by
2030xiii, primarily by sourcing its energy requirements through renewable energy
sources. Railway Electrification, improving energy efficiency of locomotives & trains
and fixed installations, green certification for installations/stations, fitting bio toilets in
coaches and switching to renewable sources of energy are part of its strategy of
achieving net zero carbon emission.

• Indian Railways as part of Mission Mode is working to harness the potential of 500
Mega Watt (MW) energy through roof top Solar panels (Developer model). As on
July 2020, 100 Mega Watt (MW) of solar plants had been commissioned on roof-
tops of various buildings including 900 stations. Solar plants with a combined
capacity of 400 MW are under different stages of execution. Tenders have already
awarded for 245 MW and target for completion of these plants is December 2022.

• One project of 1.7 MW at Bina (Madhya Pradesh) in collaboration with Bharat

Heavy Electricals Limited (BHEL) has already been installed and is presently under
extensive testing. This is first of its kind of solar project in the world.

2
https://www.indiabudget.gov.in/economicsurvey/doc/eschapter/echap06.pdf
 • In the wind energy sector, 103 MW wind-based power plants had been
commissioned. Among them, 26 MW is in Rajasthan (Jaisalmer), 21 MW is in Tamil
Nadu and 56.4 MW is in Maharashtra (Sangli). Indian Railways has also planned to set
up 200 MW wind energy plants in next Two years in Tamil Nadu, Gujarat, Rajasthan
and Karnataka.

IMPROVEMENT IN FOREST COVER OF INDIA

India is the tenth largest country by forest area in the world. It ranks third globally in annual
average net gain in forest area between 2010 to 2020. The India State of Forest Report 2020-
21xiv revealed that India's total forest cover was 7,13,789 sq. km in 2021, reflecting an increase
of 3.14% over 2011. The Gain in Forest Cover or improvement in forest canopy density may
be attributed to better conservation measures, protection, afforestation activities, tree plantation
drives and agro-forestry.
 • India was also among the top ten countries in terms of average annual net gain in
forest area between 2010-2020, as per the India State of Forest Report 2021.

STEPS TAKEN FOR PLASTIC WASTE MANAGEMENT

• In August 2021, the Ministry of Environment, Forest and Climate Change notified the
Plastic Waste Management Amendment Rules, 2021 prohibiting identified single use
plastic items, which have low utility and high littering potential by 2022. The
manufacture, import, stocking, distribution, sale and use of identified single-use
plastic, including polystyrene and expanded polystyrene, commodities shall be
prohibited with effect from the July 1,2022. The regulation seeks to strengthen the
circular economy of plastic packaging waste, promote development of new alternatives
to plastics and sustainable plastic packaging.
INITIATIVES TO CURB AIR POLLUTION

• National Clean Air Programme (NCAP)xv launched in 2019 by MoEFCC is being

implemented in 132 cities to achieve up to 30 percent reduction in concentrations of
particulate matter (PM, an air pollutant that impacts public health) by 2024 across the
country. 96 cities showed a decreasing trend of PM10 concentration in 2020-21 as
compared to 2019-20. The number of cities within the prescribed National Ambient Air
Quality Standard (PM10 less than 60 μg/m3) also increased from 18 in 2019-20 to 27
in 2020-21.

Source

• Steps to Curb Vehicular Emissions - India has leapfrogged from BS-IV to BS-VI
norms for fuel and vehicles with effect from April, 2020. Metro rail networks for public
transport have been enhanced and more cities have been covered. Cleaner/alternate
fuels like CNG, LPG and ethanol blending in petrol have been introduced.

CONSERVATION OF WATER –NAMAMIGANGE MISSION

The NamamiGange Mission aims to protect, conserve and rejuvenate the Ganga River Basin.
In 2015, the Cabinet approved the Mission for a period of five years (2015-2020) with a budget
outlay of Rs. 20,000 crores. Subsequently, on 7 October 2016, under the Environment
(Protection) Act, 1986, the National Mission for Clean Ganga (NMCG) was notified as an
authority under Environment Protection Act, which is also the nodal agency responsible for
monitoring and implementing the NamamiGange Mission. The activities undertaken as part of
the Mission rest upon four pillars –Nirmal Ganga (Unpolluted Flow), Aviral Flow(Continuous
Flow), Jan Ganga (People-River Connect) and Gyan Ganga (Research and Knowledge
Management). As on December 2021, a total of 363 projects worth Rs.30,841.53 crores have
been sanctioned under the mission.

• Given below is the state-wise distribution of the sewerage infrastructure projects

created under the Namami Gange Mission since its inception, with the highest number
of projects undertaken in Uttar Pradesh (43), followed by Bihar (29) and Uttarakhand
(26).
PARIVESH Portal
Parivesh stands for Pro-Active and Responsive facilitation by Interactive, Virtuous
and Environmental Single-window Hub. It is a portal for green clearances launched in 2018
by PM Modi. It is a web based, role-based workflow application which has been developed
for online submission and monitoring of the proposals submitted by the proponents for seeking
Environment, Forest, Wildlife and CRZ Clearances from Central, State and district level
authoritiesxvi. It automates the entire tracking of proposals which includes online submission of
a new proposal, editing/updating the details of proposals and displays status of the proposals
at each stage of the workflow. The Union Budget 2022 also highlighted the scope of expansion
of this portal through a Centralised Processing Centre-Green (CPC-Green).
SUSTAINABLE DEVELOPMENT GOAL INDIA INDEX

As per NITI Aayog’s SDG India Index released in June 2021, India’s score improved to 66
in 2020-21 from 60 in 2019-20xvii. The index also ranks states based on their performance, and
Kerala emerged on topxviii.

• Keezhattur village in Malappuram district of Kerala boasts of 100 per cent door to
door collection of dry and wet waste. A Material Collection Facility (MCF) is
available at Grama Panchayats (GPs) level and forward linkages have been established
through Resource Recovery Facility (RRF) at the block level.

• Further, an initiative that has successfully reduced the volume of dry discards or non-
biodegradable waste is the effective implementation of the Green Protocol in all
government offices, institutions and for events organized under the purview of the GP.

• All schools, Anganwadi Centres and public offices have toilet facilities.

To see India’s progress on Sustainable Development and Climate Change as mentioned

in the Economic Survey 2021, click here.
Sources

• Budget 2022 Speech by Hon’ble Union Minister of Finance (Video Link / Text Link)
• Post-Union Budget 2022-23Conference by Union Finance Minister Nirmala Sitharaman
• Summary Of Union Budget 2022-23
• Highlights Of The Union Budget 2022-23

References

• Union Budget 2022

• Economic Survey 2021-22
• SDG India Index 2020-21 Report by Niti Aayog
• https://www.narendramodi.in/pm-s-inaugural-address-at-teri-s-world-sustainable-development-
summit-560106
• National Clean Air Programme (NCAP) – A Report by MoEFCC
• Prime Minister's address at G20 Summit session II: Climate Change and Environment
• PIB Press Release on Government notifies the Plastic Waste Management Amendment Rules, 2021,
prohibiting identified single use plastic items by 2022 dated August 13, 2021
• https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1745433
• https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1586051
• PIB Press Release on Prime Minister announces Coalition for Disaster Resilient Infrastructure at UN
Climate Action Summit 2019dated September 24, 2019
• PIB Press Release on Efforts to drive low carbon development pathways in industry sector are critical
for achieving the goals of the Paris Agreement: Shri Bhupender Yadav dated November 9, 2021
• PIB Press Release on NITI Aayog Releases SDG India Index and Dashboard 2020–21dated June 3,
2021
• PIB Press Release on Union Minister of Power and MNRE, Shri R.K. Singh, delivers keynote address
at the ‘India-ISA Energy Transition Dialogue 2021’ dated 25th August 2021
• MEA Release on Universalization of the Membership of the International Solar Alliance (ISA)dated
January 15, 2021
• Article on Must save farmers from climate crisis: PM in Hyderabad in Hindustan Times dated
February 5, 2021
• https://static.pib.gov.in/WriteReadData/specificdocs/documents/2021/jun/doc20216441.pdf

Further Reading

• How green is Union Budget 2022-23?

AG/HP/RC/RN/SS

i
https://www.indiabudget.gov.in/doc/eb/sumsbe.pdf
ii
https://www.indiabudget.gov.in/doc/eb/sbe28.pdf
iii
https://www.indiabudget.gov.in/doc/Budget_at_Glance/bag7.pdf
iv
https://www.indiabudget.gov.in/doc/eb/sumsbe.pdf
v
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1794473
vi
sovereign Green Bonds will be issued for mobilizing resources for green infrastructure.
vii
https://rajyasabha.nic.in/business/Bull_No.aspx?number=61697
viii
https://isolaralliance.org/
ix
https://pib.gov.in/PressReleasePage.aspx?PRID=1795778
x
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1790941
xi
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1788011
xii
https://www.indiabudget.gov.in/economicsurvey/ebook_es2022/index.html
xiii
https://pib.gov.in/PressReleasePage.aspx?PRID=1638269
xiv
https://static.pib.gov.in/WriteReadData/specificdocs/documents/2022/jan/doc20221207001.pdf
xv
https://moef.gov.in/wp-content/uploads/2019/05/NCAP_Report.pdf
xvi
https://parivesh.nic.in/
xvii
https://pib.gov.in/PressReleasePage.aspx?PRID=1723952
xviii
https://pib.gov.in/PressReleasePage.aspx?PRID=1795402