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| Last Updated:: 16/03/2015

Modi's budget slashes environmental funding for India - TRFN

NEW DELHI, March 12 (Thomson Reuters Foundation) 


Environmentalists in India have expressed alarm over the new federal budget of the government of Prime

Minister Narendra Modi, which they say heralds substantial cuts in environmental programmes and fails to

address the country's worsening pollution and vulnerability to climate change.


The budget for the Ministry of Environment, Forests and Climate Change for the fiscal year beginning April 1 has been reduced by 25 percent, from 22.6 billion Indian rupees ($360 million) to 16.8 billion rupees ($268 million).

In his budget speech, Finance Minister Arun Jaitley announced an increase in the target for renewable energy generating capacity, to 175,000 megawatts by 2022. But the Ministry of New and Renewable Energy will see its funding for the coming year reduced by more than two-thirds, to 3 billion rupees ($48 million).

"There is a disconnect between the budget speech and the allocations," said Chandra Bhushan, deputy director general of the Centre for Science and Environment (CSE), a research and advocacy organisation based in Delhi.

"The budget speech sets ambitious targets for renewables, but this has not been matched with allocations for the ministry. Allocations for solar for rural (use) and for research on renewable (energy have) also been reduced," Bhushan said.


While increasing the tax on diesel fuel, the government failed to introduce a purchase tax on highly polluting sports utility vehicles (SUVs), which use diesel.

Environmentalists had hoped for such a tax, which the previous United Progressive Alliance (UPA) government tried unsuccessfully to introduce, because of the growing popularity of SUVs.

Formerly the preserve of the wealthy, they are now being bought by middle-income households as well, thanks to cheap bank loans.

Sunita Narain, head of the CSE, said in a statement that it would be important to maintain the increased fuel tax even if the price of fuel increased in the international market.

"To ensure that people move away from private to public transport, there should be adequate investment in infrastructure to wean us away from cars," Narain said, criticising plans to set aside 4 rupees per litre of the excise tax to support roads.

"Viewing infrastructure for transport as just 'roads' is regressive. Instead, the need is to reinvent mobility so that (supports movement of) goods and people, and not vehicles," he added.

According to Narain, while the government is no longer subsidising diesel, its price remains lower than that of petrol mainly because of the difference in fuel taxes.

"Even though there is a perceptible decline in the number of private diesel cars being sold, it is not enough to make a dent in pollution levels. Therefore, what is needed is to tax diesel vehicles to equalise the price differential," he said.

Despite some positive signs in the budget, environmentalists remain sceptical about the government's attempts to reduce coal use.

Finance Minister Jaitley announced a doubling of the levy on coal from its present level of 100 rupees per tonne. The money will go to the National Clean Energy Fund to boost the development of clean fuels and renewables.

The fund, announced by the previous government in 2010 and controlled by the Ministry of Finance, has accumulated 300 billion rupees ($4.8 billion), but the money remains unused in the absence of a defined strategy.


One of Modi's campaign slogans last year was "Congress Mukt Bharat", or India freed from Congress. The slogan is a reference to the largest party in the UPA coalition, which Modi's party saw as emphasising environmental protection over economic development.

The UPA government established eight missions under its National Action Plan on Climate Change (NAPCC), but Jaitley's budget speech mentioned only one of them - the National Mission on Sustainable Agriculture. Its funding is to be reduced by 80 percent this year, from 15 billion rupees to 3 billion rupees.

Agriculture is cited by experts as a primary source of greenhouse gas emission in India because of paddy cultivation of rice, which produces methane through extended flooding of fields and the use of cows to farm small plots of land.

Farming is also highly at risk from climate change impacts, particularly changing rainfall patterns, floods, drought and storms.

"This government is not at all concerned about the environment or climate change," charged K.N. Vajpai, head of Climate Himalaya, a non-governmental organisation focused on climate change adaptation and development and based in Uttarakhand, one of the most climate-vulnerable states in the country.

Vajpai pointed out that the budget fails to allocate funds for a Himalayan Climate Change Institute promised by Modi in response to the catastrophic Uttarakhand floods of 2013, which killed at least 4,000 tourists, pilgrims and local people.

Activists are also concerned that the government is proposing a law allowing it to acquire and sell farmland and forest from national wildlife sanctuaries for real estate or infrastructure development, without seeking the consent of farmers or forest dwellers.

"This will lead to widespread deforestation," Vajpai predicted.