While the 2017 Budget was a lost opportunity for sectors like environment and climate change, this time, the Finance Minister must set the ball rolling for India to fulfill its commitment to the Paris Agreement through budgetary allocations
The Union Budget of 2017 brought little cheer for those who cherished the environment and forests as Union Finance Minister Arun Jaitely made no special announcement for these sectors, apart from ushering in the second phase of the national solar mission, besides providing 7,000 railway stations with solar power.
The Budget last year also missed on major core issues pertaining to the environment and climate change, as a result of which, India slowed down considerably on environmental protection front. There is an urgent need to make up for the lost time and fresh, bold initiatives in the 2018-19 can help achieve just that.
The 2018 Budget can set the course for India to implement the Paris Agreement to which it is a signatory, along with other 197 nations. This will align India with the international efforts on climate change to limit global warming to two degree celsius, and ideally by 1.5 degree celsius.
This is particularly important as the global average temperature rise is already going past one degree celsius and is further projected to go past the lower limit of the agreement by mid-century. Given this, the onus has now firmly shifted to the countries’ pledges and as such, India cannot be seen fumbling on its commitments.
India, as a signatory to the Paris Agreement, committed that it would reduce carbon emission intensity by 30-35 per cent below 2005 levels by 2030. Additionally, India also agreed to increase non-fossil-fuel-based energy contribution from the current 30 per cent to 40 per cent.
Moreover, India pledged that it would add 2.5 to three billion tonne of CO2 equivalent of carbon sinks, such as forests, besides mobilising funds — both domestic and international — to fulfill adaptation and mitigation goals.
These undertakings are quite substantial, ambitious and capital intensive and the fund being allocated to the environment Ministry are crucial in achieving these objectives, provided they are used effectively and in a timely manner.
According to Economic Survey of India 2016, India’s climate action by 2030 will cost the country $2.5 trillion or over Rs 150 lakh crore at 2014-15 prices. In the 2017 Budget, fund allocation for the environment Ministry was been increased by about Rs 300 crore to Rs 2,657 crore in 2017-18.
In fact, since 2014, budgetary allocations have increased from Rs 1,599.24 crore to Rs 2,675.42 crore announced in the budget 2017-18. This constitutes an impressive increase of more than 67 per cent over three years. But the good news quickly turns adverse when one sees the area of expense. Revenue and operational expenditures have risen from Rs 1,531.88 crore in 2014-15 to Rs 2,635.39 crore in 2017-18. On the other hand, capital expenditure in the form of schemes and programmes dropped by over 40 per cent from Rs 67.36 crore during 2014-15 to Rs 40.03 crore in the 2017-18. This puts India’s climate change mitigation in serious handicap.
Coal cess and the National Clean Energy Fund (NCEF) play a major role in India’s climate action plan. Coal cess and NCEF have been lauded internationally for its forward thinking move in disincentivising coal. But as per Comptroller and Auditor General’s (CAG) audit report of 2017, the funds being transferred to NCEF have seen a drop as there is a shortfall between clean energy cess collected and the amount actually transferred to NCEF.
According to the report, a total of Rs 53,967.23 crore was collected as clean energy cess during 2010-11 to 2016-17. Against this, only Rs 15,483.21 crore (28.69 per cent) had been transferred to the NCEF in the public account, resulting in short transfer of cess to the earmarked fund by Rs 38,484.02 crore (71.31 per cent).
According to the response to an RTI filed by news website Scroll.in, unspent funds amounting to Rs 56,700 crore would be diverted to compensate for losses incurred during the rollout of the ambitious Goods and Services Tax regime in 2017. This is despite the CAG report stating in no unclear terms that such measures were “not tenable” since the NCEF is a non-lapsable fund. In effect, with no funds, the NCEF shall become defunct this year and the unspent money in its coffers is likely to be diverted to other pressing issues. This clearly is not in the best interests of the environment.
The February 1, 2018, Budget is the last opportunity for the NDA Government to make an impressive stand for the environment before it heads for the lok Sabha election in 2019. An effective fund allocation and an equally efficient utilisation is the only way forward in ensuring mitigation of climate change. The 2018 Budget can set the ball rolling in this regard.
(The writer is an environmental journalist)