How Prepared Are India's State Budgets For Climate Action
Here's a handy guide to track what India's state budgets are doing on the climate front.
Indian states have started integrating climate-related action in their annual budgets as the country looks to transition to a low-carbon economy.
The Union Budget 2022-23 speech by Finance Minister Nirmala Sitharaman in February acknowledged the need for climate action and highlighted it as one of the pillars for future development. It, however, was lacking in any significant announcements on policy or spends.
Sitharaman's state-level counterparts have in their budget speeches started making monetary allocations towards energy transition and ecological protection.
Not all details are clear yet. A handful of state budgets have announced plans to increase renewable capacity but did not specify any allocation. Others announced proposals to implement schemes that may take more than a year to be implemented.
BloombergQuint has compiled the key climate-related announcements that have been made in the state budgets so far:
Andhra Pradesh: Increased Allocation, But Lacking In Detail
Andhra Pradesh's budget did not have any announcements towards climate-related activities or energy transition. Finance Minister Buggana Rajendranath spoke about developing climate-resilient cities and expanding green spaces in urban areas but did not make any specific scheme allocations.
An allocation of Rs 685 crore in FY23 has been proposed for the Environment, Forest, Science and Technology Department—a 60% increase from the revised estimates of FY22.
Bihar: Funds For Climate Department Reduced, Solar Plans Announced
Bihar's Deputy Chief Minister Tarkishore Prasad highlighted how the state had lost green cover in the annual forest survey done by the central government. He, however, didn't announce any specific measures that the state would undertake to fix that.
Instead, the state cut FY23 allocation for the Environment, Forests and Climate Change by 22.7% to Rs 662.85 crore. Of this, over 90% is revenue expenditure towards forestry and wildlife.
A further Rs 1,516.52 crore have been allocated as capital for power projects, and another Rs 96.5 crore as loans. This will include funds for a 200-megawatt grid-connected ground-mounted solar power plant for which work is already underway. It will also fund 18.8 MW of grid-connected solar rooftop capacity that will be installed in government buildings like health centres and higher education institutes.
Chhattisgarh: Push For Solar Pumps
The budget, presented by Chief Minister Bhupesh Baghel, focused mostly on expanding the use of solar water pumps among the state's farming community.
The state will make a provision of Rs 416.9 crore for installing additional 15,000 solar irrigation pumps of 3-5 horsepower capacity under Saur Sujala Scheme. Over 1 lakh farmers have received solar pumps in the state so far.
The state will also provide Rs 100 crore for setting up 10,000 solar pumps under the Pradhan Mantri Kusum Yojana.
Gujarat: Big Renewable Ambitions
Finance Minister Kanubhai Desai announced plans for setting up large-scale renewable energy projects and targeted an increase in the state's already high solar rooftop capacity.
Rs 60 crore have been set aside for a group captive solar and wind energy park of 150 MW capacity. The project would cost Rs 600 crore, the finance minister said, without elaborating where the rest of the funds will come from. It will be used to power municipal street lighting, water and sewage works.
A provision of Rs 825 crore for setting up solar rooftops in 3 lakh houses. The state has over 1.6 gigawatt capacity of rooftop solar already installed in more than 3 lakh buildings. Another Rs 37 crore allocated to create 10 MW capacity of solar power on rooftops of government buildings.
State to provide total assistance of Rs 75 crore for installing 3 HP solar pumps to tribal farmers.
The state will also spend Rs 50 crore for research and development of green hydrogen.
Gujarat's climate change department has been allocated Rs 871.7 crore for FY23, a 31% increase in funds.
Buildings shrouded in smog in Noida, Uttar Pradesh on Nov. 9, 2021. (Photographer: Prashanth Vishwanathan /Bloomberg)
Haryana: Solar Power, Clean Air In Focus
Chief Minister Manohar Lal Khattar, who also holds the finance department's charge, announced various proposals to boost the state's solar capacities. He also unveiled a plan to set up a dedicated climate fund.
The state has provided Rs 565 crore towards its climate change-related initiatives. This is the first time it allocated funds under such a head.
A climate and sustainable development fund has been proposed to be set up for activities around waste management, pollution, recycling plastic and stubble burning. The total corpus has not been announced.
The state will identify air pollution hotspots and take steps to convert them into green zones. It will also undertake a tree census, and develop an ecotourism policy.
A total of Rs 7,203 crore has been allocated for the electricity and renewable energy sector.
The state to install 50,000 solar water pumps of 3-10 horsepower with a 75% subsidy—Rs 5,983 crore has been set aside.
All government offices and higher education institutes with electricity demand of over 10 kilowatt shall shift to rooftop solar or other suitable solar power systems. Government offices will also introduce prepaid metering systems.
Policies incentivising a push to cleaner fuels have also been proposed, without specifics on fund allocations.
Medium and small industries proposed to get 50% reimbursement on VAT collected on natural gas to help push industry to cleaner fuels.
For micro, small and medium enterprises in the National Capital Region, the state has proposed a grant for converting coal or diesel-powered boilers to cleaner fuels. The grant will be up to 30% of the capital expenditure with a maximum limit of Rs 15 lakh.
Himachal Pradesh: Aim To Become India's First Green State Takes Priority
Chief Minister Jai Ram Thakur, in his speech, kept aside Rs 448 crore for the state's power sector as it plans to become India's first to get all of its energy from renewables by 2030.
Solar power systems to be installed in 50 government colleges, 50 schools and 20 industrial training institutes.
To set up 2 MW solar power plant in Kaza, Spiti through a joint venture between state electricity board and Solar Energy Corporation of India Ltd. The commissioned plant will have 1 MWh battery storage system.
Subsidy for grid connected rooftop solar increased to Rs 6,000 per KW from Rs 4,000 earlier.
Satluj Jal Vidyut Nigam Ltd. to invest Rs 600 crore for 150 MW of solar capacity.
Proposal to initiate green e-mobility programme on the Shimla-Solan National Highway with bilateral external funding. This will focus on building charging stations and battery replacement networks on the route.
The state's budget also focused on improving ecological outcomes and augmenting its tourism industry. In the budget, Rs 771 crore has been set aside for forests and wildlife, slightly lower than the revised estimate of Rs 780 crore in FY22.
20 nature trails to be developed to promote ecotourism.
Forest department to spend Rs 200 crore for afforestation, soil conservation, water storage and ecotourism works.
14 new monitoring stations to be set up on various rivers and tributaries to track water quality.
Jharkhand: Biodiversity Park, Solar Plans Feature In Speech
Jharkhand's Finance Minister Rameshwar Oraon made a few announcements related to wildlife conservation and incentives for setting up solar projects.
The forest, environment and climate change department of the state has been allocated Rs 1,019 crore—a 33% bump up from the revised estimates of FY22.
A biodiversity park in Namkum, Ranchi to be turned into an ecotourism park under a public-private-partnership model.
A new scheme proposed to be launched for conservation of wildlife in the Palamu Tiger Reserve.
The state has also increased the subsidies it offers for available non-conventional sources of energy to Rs 200 crore from Rs 150 crore earlier under various schemes. The state has set a target to add 1 GW of solar capacity in the upcoming fiscal through these incentives. It currently has only 96.4 MW of solar power.
Solar panels on the roof of an apartment block in Bengaluru -Feb. 21, 2022. (Photographer: Dhiraj Singh/Bloomberg)
Karnataka: Getting Ready For The Energy Transition
The southern state's Finance Minister Basavaraj Bommai made allocations that would prompt a shift towards non-fossil fuel energy sources. He also announced a scheme to address the issue of plastic pollution.
The state will set up 10,000 solar-based irrigation pump sets at a cost of Rs 227 crore. These will be done through the Karnataka Renewable Energy Development Ltd.
A 2,000 MW capacity underground renewable energy storage centre has been proposed to set up in the Sharavathy basin for Rs 5,391 crore. So far, only a handful of large energy storage solutions in India have been proposed with government-owned entities like NTPC Ltd. and Solar Energy Corp. floating tenders.
The state will formulate a green hydrogen policy in line with the centre's announcement and explore the possibility of a pilot project.
It will also explore the possibility of installing 5,000-megawatt capacity hybrid renewable energy park in eight identified districts.
The state has allocated Rs 1,478 crore for the environment, forestry and wildlife development, an 11% increase over the previous fiscal. Karnataka will also launch a scheme to address the issue of plastics polluting water resources in coastal areas. With assistance from the World Bank, the state plans to spend Rs 840 crore over five years towards this.
Kerala: Incentives For 2050 Net-Zero Goal
The coastal state has set a target to achieve net-zero emissions by 2050. Finance Minister KN Balagopal's budget speech made monetary allocations towards this and identified next steps. He also said a separate environment budget will be unveiled from the next fiscal.
The state has kept aside around Rs 60 crore to be spent towards new and renewable energy. The bulk of it will be spent towards offering grants and research.
Rs 15 crore earmarked as interest subsidy on loans availed by residential consumers for installing solar panels.
Rs 32 crore set aside for a viability gap fund for production of household green energy.
50% of the ferry boats in the state to be converted to solar in the next five years.
Solar pushcarts will be provided to street vendors.
Small solar-wind hybrid power systems of 1 KW to be set up on pilot basis in fishing boats that are engaged in deep water fishing.
Rs 5 crore for rooftop solar at all colleges and other institutions
The state has also announced new funding for cleaning up its water bodies.
Rs 23 crore allocated for cleaning of rivers and lakes at various locations.
Rs 10 crore for expanding a scheme for removal of plastic waste from water bodies across the state.
Another Rs 10 crore for studying possibilities of reusing waste material.
Besides, the state wants to disincentivise ownership of fossil fuel-powered cars. It announced a green tax on all diesel vehicles barring two-wheelers of up to a maximum of Rs 2,000 based on weight. Old vehicles, above 15 years, will pay 50% higher rates.
Madhya Pradesh: Few Allocations, Lots Of Exploration
Finance Minister Jagdish Devda's budget speech focused mostly on infrastructure and social welfare. He, however, announced that the state is exploring multiple projects for increasing renewable capacity.
Exploring setting up 1,500 MW solar park in Sagar district.
Floating solar project of 600 MW in Omkareshwar Dam being explored.
1,500 MW solar project being explored in Chhatarpur.
Proposed to convert Sanchi into a solar city.
Rs 1,300 crore set aside for installation of solar water pumps in rural areas.
Maharashtra: Solar Power And A Push For Revamped Environment Education
India's richest state has announced plans to augment solar capacity and increasing environmental awareness in the state. Finance Minister Ajit Pawar also announced allocations for river conservation.
The state has more than quadrupled its allocation to new and renewable energy to Rs 396 crore. This will include incentives for renewable energy and installation of solar pumps, amid others.
Solar power projects of 577 MW to be set up at Mauje Kodgaon and Mauje Shindala, Mauje Sakri, Washim, Mauje Kachrala and Yavatmal.
Apart from this, 2,500-MW capacity solar energy park will be developed in the fifth-largest renewable producing state.
Maharashtra has allocated Rs 473.5 crore to its environment and climate change department—61% higher than the previous fiscal. Of this, Rs 253 crore will be solely for spending on various programmes.
Rs 100 crore to be set aside under Mazhi Vasundhara Mission 2.0 for local government bodies to implement action towards biodiversity, waste management, energy efficiency and water conservation.
A new school curriculum on environment to be prepared for students of up to Class 8.
Proposal to spend Rs 150 crore for conservation of 23 rivers.
Rs 286 crore to be spent over the next five years for the Maharashtra Gene Bank Project to conserve genetic biodiversity.
Meghalaya: Protecting Its Ecology
Chief Minister Conrad Kongkal announced several initiatives that the state is taking towards sustainability and ecology.
Rs 227 crore allocated towards three externally-aided projects related to management of forest resources and communities.
State to undertake project for building 2,500 small and multipurpose reservoirs to address water shortage challenges in rural areas. Project to be implemented with support from Asian Development Bank at a cost of about Rs 720 crore over five years.
State will provide cash support to communities that preserve and protect existing forests. It will be part of a larger project, funded by Germany's KfW, aimed at protecting vulnerable catchment areas in Umeiw and Ganol rivers.
Implement ecological restoration of the Sohra Plateau for a cost of Rs 1,125 crore over five years.
Mizoram: Enriching Natural Resources
The budget, presented by Chief Minister Pu Zoramthanga, announced a handful of measures for conservation of natural resources in the state.
Rs 10 crore for soil conservation measures through a loan from Nabard.
Biodiversity Conservation and Forest Enrichment project for Rs 484.27 through financing from the central government.
Rajasthan: Already Among India's Largest Solar Producers
One of the largest solar power generators in the country, Rajasthan's budget didn't make any announcements related to clean energy transition. Chief Minister Ashok Gehlot's budget made a few announcements around afforestation and waste management.
Plantation over 50,000 hectares to improve the state's green cover.
Botanical gardens to be established in Jodhpur, Bikaner, Kota, Udaipur, Bharatpur and Ajmer.
Rs 10 crore allocated for conservation and management of Sambhar Lake.
Captive animal sponsorship scheme to be launched in zoological parks where individuals or organisations can adopt animals.
State to launch an e-waste disposal policy and develop an e-waste recycling park in Jaipur for Rs 50 crore.
Telangana: Creating 'Urban Forests'
Finance Minister Thanneru Harish Rao's budget for the state focused more on welfare spending and had little to offer on the climate front. In his speech, Rao mainly reiterated schemes and initiatives around renewable energy and conservation that are already in place.
State to spend Rs 932 crore for improving green cover through the Telangana ku Haritha Haram initiative. This will go towards rejuvenation of forest areas and developing 'urban' forests in cities and towns.
A woman sits among electronic waste as she dismantles computer components at a family compound of houses in Sangrampur village, West Bengal in 2014. (Photographer: Sanjit Das/Bloomberg)
Tamil Nadu: Picks Fund Route For Energy Transition
Finance Minister Palanivel Thiagarajan missed out on making any announcements around energy transition. He, however, did announce the launch of a climate change fund that will be used to mobilise capital for such projects.
The state has kept its allocation for new and renewable energy largely unchanged at Rs 100 crore, all of which is revenue expenditure.
Spending on the environment, climate change and forest department has gone up 44% to Rs 849 crore. Over 90% of these funds will be spent towards the forestry department.
Botanical garden to be developed near Chennai at a cost of Rs 300 crore in partnership with Kew Gardens of London. Detailed project report will be prepared by the government.
Rs 10 crore has been kept aside for Project Nilgiri Tahr, that is aimed towards conservation and expansion of the habitats for the state animal of Tamil Nadu.
A forest commission shall be set up to recommend policy changes in conservation, expansion of green cover, involvement of tribals in forest management, prevention of man-animal conflicts and capacity building.
West Bengal: Some Allocations, No Specifics
The budget speech by Finance Minister Chandrima Bhattacharya did not make any new climate or energy-related announcement. She apprised the house on progress made in existing initiatives and allocated funds under various heads without elaborating on specifics.
Allocated Rs 75.5 crore for non-conventional and renewable energy.
Allocated Rs 938.5 crore towards forests.
Rs 99 crore set aside towards environment-related activities.