In an era defined by climate change and environmental degradation, nations worldwide are reshaping their economic strategies. India, a rapidly growing economy and a key player in global climate negotiations, has embraced “Green Budgeting” to weave sustainability into the core of its fiscal planning. The Union Budget 2025-26 marks a significant leap in India’s commitment to aligning economic growth with environmental responsibility.
What is Green Budgeting?
Green Budgeting is a strategic approach where governments integrate environmental objectives into their financial and economic policies. It ensures that budgetary allocations and expenditures promote:
- Climate change mitigation and adaptation
- Environmental conservation
- Promotion of a green economy
- Sustainable infrastructure and urban development
Globally, countries like France, the UK, and Canada have pioneered Green Budgeting practices. India is now charting its own ambitious path.
Key Features of Green Budgeting in Union Budget 2025-26
A. Strengthening Governance for Green Sectors
- 10% increase in budget allocation for the Ministry of Environment, Forest, and Climate Change (MoEFCC) to ₹3,412.82 crore.
- 39% increase in allocation for the Ministry of New and Renewable Energy (MNRE) to ₹25,649 crore.
B. Boost to Clean Energy and Solar Power
- 66% budget increase for distributed solar energy to ₹22,600 crore.
- Launch of PM Surya Ghar: Muft Bijli Yojana targeting 1 crore households.
- Expansion of PM-KUSUM Scheme with a 3% budget rise to ₹2,600 crore.
C. Focus on Renewable Energy Transmission and Storage
- ₹600 crore allocated for Green Energy Corridors.
- Doubling of budget for Green Hydrogen development from ₹300 crore to ₹600 crore.
D. Expansion of Nuclear Energy
- National Nuclear Mission aims to boost capacity to 100 GW by 2047.
- ₹20,000 crore allocated for R&D in nuclear technology.
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E. Promotion of Green Mobility
- Basic customs duty was removed on lithium, cobalt, and zinc to reduce EV manufacturing costs.
- Expansion of the PLI Scheme for EV battery production.
F. Advancement of the Circular Economy
- Fiscal incentives for recycling in shipbuilding and mining.
- Focus on recovering critical minerals and promoting industrial recycling.
G. Climate-Resilient Agriculture
- Support for the development of climate-resilient seeds.
- Financial aid to farmers affected by climate-induced yield fluctuations.
H. Biodiversity and Natural Resource Conservation
- Strengthened allocations for Project Tiger and Project Elephant.
- Conservation of aquatic ecosystems to bolster climate resilience.
I. Urban Sustainability Initiatives
- Urban Challenge Fund of ₹1 lakh crore for water and sanitation infrastructure, with private sector collaboration.
Impact on Sustainable Development Goals (SDGs)
Green Budgeting in India directly supports key SDGs:
- SDG 7: Affordable and Clean Energy
- SDG 9: Industry, Innovation, and Infrastructure
- SDG 11: Sustainable Cities and Communities
- SDG 12: Responsible Consumption and Production
- SDG 13: Climate Action
- SDG 15: Life on Land
Challenges in Implementing Green Budgeting
Despite major strides, India faces several challenges:
- Mobilizing private investments
- Accelerating project implementation
- Reducing dependence on imported raw materials
- Raising public awareness for green initiatives
The Way Forward
To maximise the impact of green budgeting, India must:
- Enhance Public-Private Partnerships (PPPs) and Green Bonds
- Accelerate R&D in green technologies
- Strengthen governance frameworks for faster execution
- Launch massive public education campaigns for sustainable living
Conclusion
Green budgeting in the Union Budget 2025-26 represents a transformative shift in India’s approach to growth—from a GDP-focused model to a sustainability-driven one. By integrating environmental stewardship into fiscal strategies, India is not just meeting its climate commitments but also paving the way for an inclusive, resilient, and prosperous future.
India’s green budgeting journey is not just a financial manoeuvre—it’s a commitment to building a greener, better tomorrow for generations to come.
MCQs:
- What does green budgeting primarily aim to integrate into fiscal policies?
- (a) Defense priorities
- (b) Environmental sustainability
- (c) Agricultural reforms
- (d) Trade liberalization
Answer: (b) Environmental sustainability
- What is the target solar capacity India aims to achieve by 2030?
- (a) 100 GW
- (b) 200 GW
- (c) 300 GW
- (d) 400 GW
Answer: (c) 300 GW
- Under Green Budgeting 2025-26, how much has the Ministry of New and Renewable Energy’s budget increased?
- (a) 10%
- (b) 25%
- (c) 39%
- (d) 50%
Answer: (c) 39%
- Which scheme aims to provide solar energy to 1 crore households?
- (a) PM-KUSUM
- (b) PM Surya Ghar Muft Bijli Yojana
- (c) Urban Challenge Fund
- (d) Swachh Bharat Mission
Answer: (b) PM Surya Ghar Muft Bijli Yojana
- Which SDG directly relates to increased investment in renewable energy?
- (a) SDG 7
- (b) SDG 9
- (c) SDG 11
- (d) SDG 12
Answer: (a) SDG 7
Source : YOJANA March 2025
