Finance Minister Nirmala Sitharaman began this year’s budget speech with a quote from Telugu poet Gurajada Apparao: 'A country is not just its land, but also its people.' The 2024 budget focuses on 'Sabka Vikas' (inclusive development), aligning with the vision of a developed India. This vision is deeply connected to India's commitment to 'Clean India, Green India' and achieving the Net Zero target by 2070. The significant budget allocation for renewable energy (RE) further emphasizes this commitment.
Increased Budget for Renewable Energy
The Ministry of New and Renewable Energy (MNRE) has witnessed a substantial budgetary increase, with a total outlay of ₹26,549 crore—a significant rise compared to previous years. This indicates India's steady transition from fossil fuels to a cleaner energy future.
With India’s commitment to achieving 500 GW of non-fossil fuel energy capacity by 2030, this budget has placed special emphasis on expanding solar power capacity. Key initiatives like the PM Surya Ghar Free Electricity Scheme and PM KUSUM Yojana are at the forefront. Under the PM Surya Ghar scheme, nearly 10 lakh rooftop solar systems have already been installed, and the scheme has received ₹20,000 crore in funding. The plan aims to cover 40 lakh homes by March 2026 and 1 crore homes by March 2027. Additionally, ₹1,500 crore has been allocated to the Solar Power Grid Program. Policy measures, such as reducing the custom duty on solar cells from 25% to 20%, further support these initiatives.
The PM KUSUM Yojana focuses on integrating solar energy into the agricultural sector and has received ₹2,600 crore in this budget. This initiative aims to provide sustainable energy solutions for farmers and reduce dependency on conventional power sources.
Strengthening the Grid and Transmission Infrastructure
The budget also prioritizes grid integration improvements and interstate transmission capacity expansion, ensuring seamless incorporation of increased renewable energy capacity into the national grid. The Green Energy Corridor remains a crucial component of India's renewable energy infrastructure, with ₹600 crore allocated for its development. Additionally, funding for power system strengthening has been increased, though year-over-year increments in financing remain moderate.
Financing Green Energy Initiatives
The Sovereign Green Bonds (SGBs) play a pivotal role in financing green energy projects, including the Green Energy Corridor, with ₹20,000 crore raised through these bonds. The Green Energy Corridor is integral to India's long-term clean energy strategy, facilitating wider renewable energy adoption and reinforcing the transmission network.
Boosting Green Hydrogen and Bio-Energy
The government’s focus on green hydrogen further demonstrates its commitment to the clean energy transition. The National Green Hydrogen Mission has been allocated ₹600 crore, which is double the previous year’s budget. With ₹535 crore designated for capital expenditure, this initiative aims to support domestic electrolyzer manufacturing, a crucial process in producing green hydrogen from water using renewable electricity. Additionally, ₹325 crore has been allocated to the Bio-Energy Program.
Recognizing the role of nuclear energy, India has set an ambitious target of achieving 100 GW nuclear power capacity by 2040. However, budget allocations for wind energy have seen a decline, which may impact the sector’s growth.
Conclusion
India’s budget 2024 demonstrates a strong commitment to green energy, with substantial investments in solar energy, hydrogen energy, and grid infrastructure. While financing through Sovereign Green Bonds and policy-driven incentives supports renewable expansion, consistent year-over-year increases in funding will be crucial for achieving long-term sustainability. With a well-defined roadmap, India is steadily progressing towards a cleaner, greener future and the Net Zero goal by 2070.
By : team atharvaexamwise
