The Union Budget 2024 is predicted to be a watershed moment for India’s green economy. As the country stands at a crucial juncture in its journey towards sustainable development, this budget offers a significant opportunity to advance our commitment to a greener future. For India to establish itself as a global leader in the green economy, the government must prioritise sustainable growth, energy security, and environmental management in its financial planning. India’s green energy sector has already made remarkable progress, thanks in part to initiatives like the Production Linked Incentive (PLI) schemes, which aim to boost domestic manufacturing and enhance the competitiveness of Indian companies. We must implement specific plans and tackle roadblocks to push for the widespread use of green energy solutions and tap into the sector's full potential. Cutting the GST from 18% to 5% on renewable energy parts could do the trick. This tax decrease would reduce project costs, making them more desirable to investors and increasing acceptance. The Institute for Energy Economics and Financial Analysis (IEEFA) believes this measure might result in a 15% increase in renewable energy systems by 2030. Encouraging foreign competition by opening the market to international module manufacturers could drive innovation, reduce prices, and improve component quality. Indian solar module prices are currently 25-30% costlier than global rates because of import regulations and high tariffs. Creating a level playing field and promoting competition will ensure the sustainable growth of the green energy sector. Exempting solar procurement by commercial & industrial (C&I) consumers from the Approved List of Models and Manufacturers (ALMM) will raise domestic manufacturing capacity and assist in boosting market growth as awarded companies can only manufacture a certain number of aircraft, thanks to the limited ALMM approval target levels and lack of direct subsidies. A reliable power supply becomes essential as India transitions into a greener future. Investments in battery storage must be encouraged, and incentives should be given for Round-The-Clock (RTC) projects. The country will require 27GW of battery storage by 2030 to fulfil renewable energy goals projected by India's Central Electricity Authority (CEA). Innovation in the private sector and grid resilience will be strengthened to guarantee India's required reliable electricity. The original goal of saving 360$ Billion on renewable energy infrastructure has now been increased to save up to 361$ billion, which seems to be a better effort. To fulfil this, the 2024 budget should be well-funded and facilitate the private sector. Green bonds, which have helped raise over USD 21 billion as of February 2023, are an innovative financing instrument important to mobilise capital for sustainable projects. Other ways should be considered to make these funding options more investor-friendly. Adopting the practice of recycling aluminium scrap over traditional ones could benefit as it produces comparatively less carbon emissions. The Material Recycling Association of India (MRAI) advises cutting 2.5% of import duty on aluminium scrap for the same purpose. Building on the momentum of last year’s budget, which prioritised green growth, the upcoming Union Budget presents a noteworthy opportunity to strengthen India’s waste management infrastructure further. However, challenges like inadequate waste collection infrastructure and inefficient sorting and recycling systems remain. The government must support waste management agencies and streamline the e-waste and plastic waste supply chain to advance India’s circular economy goals. As we approach Budget 2024, we must ask ourselves: What legacy do we want to leave for future generations? Will we utilise this opportunity to lead the world in sustainable development, or will we fail in facing obstacles? The decisions we make now will shape our future. Budget 2024 is more than a mere budget concerning money. It is an opportunity to reprioritise the direction of our nation and pave the way for a greener and far more sustainable India.
21 Jul 2024
Anushka Bharadwaj
