‘Budget 2021-22 presents a mixed bag of welcome moves and missed opportunities for the environment’

Earlier this week, India’s FM Nirmala Sitharaman presented the country’s budget for the year 2021-22. While there are clear signs of spaces being carved out to incorporate environmental perspectives, India’s economic and health priorities have also translated to compromises on the environment. Carbon Copy speaks to Dr. Anjal Prakash, Research Director and Adjunct Associate Professor at the Indian School of Business (ISB) and one of the lead authors of the Inter-governmental Panel on Climate Change Sixth Assessment Report (IPCC AR6) due to be released later this year, about how the current budget sizes up relative to environmentally-conscious budgeting strategies.

Q. From an environmental perspective, how would you rate FM Nirmala Sitharaman’s budgets?

In her first budget as finance minister in 2019, Nirmala Sitharaman had presented a much greener budget compared to her predecessors in the past. This is because the budget carved out a new Jal Shakti Mantralaya and focused on integrated management of water resources with an ambitious programme to supply water to all rural households by 2024. The Swachh Bharat Abhiyan was the second focus of the budget. The Ujwala Yojana focusing on energy efficiency in major sectors, the allocation for combating air pollution via the Green Earth and Blue-Sky programme were some of the other major highlights of the 2019 budget, which showed that there is green thinking in the North Block.

I would have expected the present budget (2021-22) to be a lot greener. However, I commend the FM for not reducing some of the earlier work that has strong implications on environmental management. But as a person working on climate change, we always expect more.

Q. How well has this been addressed in the Union Budget 2021-22?

The FM’s six-pillar budget addressed many green concerns. An alternate six aspects of a green budget include – [1] clean drinking water, including river restoration; [2] clean air; [3] clean environment (plastic ban, solid waste management); [4] restoring forests and increasing forest covers; [5] clean energy (focus on renewables and phasing out coal) and [6] resilience building as part of developmental planning. Out of these six areas, the government has allocated resources for three-and-a-half areas, leaving out forests, resilience building and a complete ban on all forms of plastics. 

The increased allocation to tackle air pollution in 42 urban centres, a whopping increase in strengthening health infrastructure, the launching of the urban Jal Jeevan mission, the focus on solid waste management in 500-odd AMRUT cities and the urban swachhata mission, the launching of hydrogen energy mission and increased allocation for Ujjwala beneficiaries are some of the highlights of the budget going green and this government must be applauded for this. What was left out was a programme to increase forest covers, its restoration and the political will to implement the community forest rights Act. This would have provided both adaptation and mitigation co-benefits and would have also boosted forest-based industries to give employment to the poorest in India – the tribal and forest-dependent communities.

Q. Can you explain the concept of ‘green budgeting’? How well is the concept of green budgeting aligned with climate-responsive budgeting?

The Organisation for Economic Co-operation and Development (OECD) defines green budgeting as a policy-making instrument that helps in achieving environmental and climate goals. A green budget means assessing the impacts of budget and fiscal policies on the environment as well as understanding how it would boost sustainable development and chart out a green future for today and our future generations. In simple terms, green concerns could be fully integrated into all aspects of the economy based on the principles that creating a good environment and combating climate change is good for the economy as well – that the people, planet, and profits are aligned and not in contradiction with each other.

Green budgeting and climate-responsive budgeting are inextricably aligned, with the latter representing a smaller, nuanced subset of a larger green budget. Formulating a climate-responsive budget would logically be the next significant step in the green-budgeting process.

Q. One of the major environmental issues in the country is that of air pollution. How well has this been tackled by the NCAP? Is the support provided to NCAP for 2021-22 adequate to begin bringing pollution levels under control? Is there any area of deficiency that should have/could have been addressed by the FM?

The NCAP was envisaged as a long term and time-bound strategy to tackle air pollution by achieving a 20-30% reduction in particulate matter concentrations by 2024, keeping 2017 as the base year. So far, we have seen that many new initiatives have been undertaken to monitor air pollution. The focus should be on solutions toward clean air. Provisions could be made to see more e-vehicles on the ground, subsidies on solar storage batteries and charging infrastructure, especially in urban areas. Zero GST on these products and time-bound charging infrastructure will help people who want to buy an electric vehicle. Also, the programme needs close monitoring as many targets envisaged in the budget are still a pipe dream. A recent review of NCAP by the Council of Energy, Environment and Water (CEEW) shows that only 48 out of 102 cities have prepared the clean air plan and only 24% actions were allotted to the pollution control boards. The study has several recommendations that could be investigated, including budgeting the financial needs for each action point, identifying potential revenue streams and raising funds to execute actions. Budget allocations on these could be helpful for cities to take this issue further.

Q. How can schemes such as Swachch Bharat Abhiyan and Smart Cities Mission be integrated into green budgeting?

A country of our size, it is a shame that there is no city in India that could be called fully sanitised and climate resilient. To make our cities fully sanitised, it would be a herculean task to only focus on centralised sewerage treatment and solid waste management as being done now. We need to move further and combine the efforts of decentralised management of our waste. Can we have at least one city that can be made fully sanitised and climate-proof by 2024? What does it mean – it means that we need to expand the success of the Swachh Bharat Mission for promoting advanced, cost-efficient, and decentralised technologies that can result in making a city fully sanitised. For making it climate-resilient, several actions would be needed, including strengthening infrastructure, early warning systems and having a cadre of local people who can help in need. Further, incentivising the collection of single-use plastics by improving their collection rates or showing cheaper alternatives could be an answer as we have failed to completely ban the single-use plastics in India.

Q. Do you feel adequate space has been created in the budget for the participation of MSMEs while visualising green growth? How can a circular economy be incentivised both for consumers and industry, including MSMEs?

There is inadequate support for green start-ups. A lot of experiments are happening at the local level, which could be extrapolated at scale so that it could benefit a larger population. For example, we have seen edible cutlery invented byNarayana Peesapaty, a Hyderabad-based researcher, a couple of years ago. However, there could be support for him by buying the products for railways and airlines. Similar is the story of eco-friendly straws. To start with, all government canteens could be asked to use only eco-friendly straws or there could be no GST for the sale of these green products. A couple of years ago, plastic road experiments came to light, but we do not see further uptake of such green innovations.