Background

Climate change is globally considered to be the greatest risk from business and social perspective and a key solution is sustainable development. The rising temperatures, melting glaciers, uncertain weather patterns, increased generation of e-waste and hazardous substances, have resulted in Green Initiatives becoming part of the countries’ and businesses’ top priorities. India is among the countries most affected by the impact of extreme weather events due to climate change and rising temperatures.

The Indian Union Budget 2025-26 has made a positive impact by balancing environmental and social commitments with ensuring good governance practices, all while transitioning towards a Net-Zero goal of 2070. India is committed to the Paris Agreement and successively our Nationally Determined Contributions (NDCs) for decarbonization with low carbon economy.

A comprehensive energy transition and decarbonization goal with 500GW renewable energy, is now supported by a new Nuclear Energy Mission. Social sustainability and inclusion is supported by rural prosperity and resilience program to curb rural migration by enhancing local employment. Good governance will be established by regulatory reforms for sustainable industries and investment friendly ESG Index

Major Projects Considered for the Sustainable Development

The focus will be on Small Modular Reactors (SMR) with the allocation of Rs. 20,000 crores to develop the required nuclear energy by 2047. Separate Rs.1,500 crores has been kept for solar power through the grid sector. Rs. 2,600 crores for Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyaan(PM-KUSUM) and Rs. 20,000 crores allocated for PM Surya Ghar Muft Bijli Yojana which tragets installation of rooftop solar in one crore households providing upto 300 units of free electricity monthly.

 

The existing Solar Power Grid scheme will be subsumed under this scheme along with the remaining financial outlay towards achieving the Net-Zero target. Since industry contributes majority part in this energy transition, this budget included the promotion of solarization with the support of MSME and clean tech domestic manufacturing of solar photovoltaic cells, Electric vehicles batteries, electrolyzers and wind turbines.

 

To promote green manufacturing, Rs. 25,000 crores is allocated as Maritime Development Fund. It will support green shipping initiatives and to promote circular economy in ship breaking. Government has extended Customs duty exemptions for raw materials in Electric Vehicles (EV) manufacturing and expansion of scrap recovery for critical mineral and rare earth elements.

 

Agriculture sector accounts for a significant portion of India’s Greenhouse Gas (GHG) emissions, hence the Budget has prioritized sustainable agricultural practices, including the promotion of climate-resilient seeds and organic farming techniques. Financial support for precision agriculture tools, drip irrigation systems and soil health improvement initiatives, can help reduce emissions and improve productivity.

 

Sustainable agriculture is one of the focus areas with the launch of National Mission on High Yielding Seeds with climate resilient crop varieties, crop diversification and improved irrigation. This will get additional scientific support for crop productivity for cotton farmers. To create sustainable cities, water and sanitation, additional funds worth Rs. 1 lakh crores are allocated as Urban Challenge fund. 

 

To enhance workforce development and diversity entrepreneurship, support program launched for 5 lakh first time women and scheduled caste, scheduled tribe entrepreneurs. This will also support commitment of increasing women’s participation in economic activities to 70%. Additionally Gig worker benefits are introduced with healthcare coverage through Pradhan Mantri Jan Arogya Yojana.

Conclusion

The upcoming budget provides a unique chance to integrate sustainability into the nation's growth blueprint. The current global context marked by geopolitical tensions, volatile crude oil prices, realignments in global value chains and stagnating global economic growth, demands robust policy measures. 

 

To manage these commitments, a high-level committee has been formed to oversee stricter non-financial sector regulations. This includes reforms in ESG reporting, environmental regulations, policies for critical mineral recovery and the creation of an investment-friendly index for states.

 

The Union Budget 2025 thus acts as a critical lever to propel the nation towards a resilient and sustainable economy, balancing its economic aspirations with the imperatives of climate change mitigation and adaptation. These allocations in the Union Budget represent Government of India’s robust framework towards decarbonization and sustainability goals.
 

 

 

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