Event Report
Sana Ansari
As part of IMPRI’s 6th Annual Series of Thematic Deliberations and Analysis of the Union Budget 2025-26, the IMPRI Center for Environment, Climate Change, and Sustainable Development (CECCSD) organized a thematic discussion on The Environment and the Union Budget 2025-26.
The program commenced with Ms. Sana Ansari, Researcher at IMPRI who introduce the chair of the session, Prof. Krishna Raj, Visiting Professor at IMPRI and Professor at the Centre for Economic Studies and Policy, Institute for Social and Economic Change (ISEC), Bangalore, India.
She then introduced the distinguished panel of experts, which included:
- Mr. Soumya Dutta, Co-Convener, South Asian People’s Action on Climate Crisis (SAPACC), New Delhi
- Prof. Shyamala Mani, Senior Advisor, WASH and Waste Management, CCDC, Centre for Chronic Disease Control; Former Professor, National Institute of Urban Affairs (NIUA), New Delhi; Visiting Professor, IMPRI
- Mr. Debadityo Sinha, Lead, Climate and Ecosystems, Vidhi Centre for Legal Policy, New Delhi
- Ms. Prarthana Borah, Independent Advisor to Environmental Startups
- Mr. Himanshu Shekhar, Senior Editor (Political and Current Affairs), NDTV India; Visiting Senior Fellow, IMPRI
- Ms. Bhavreen Kandhari, Founder, Warrior Moms
Following the introductions, Team IMPRI delivered a presentation on key budgetary insights, led by Ms. Deepanshi.
Opening remarks by Prof Krishna Raj
Prof Krishna Raj began the session by explaining the context of the Union Budget 2025-26. He highlighted that the Indian economy’s growth rate has declined from 7% to 6.4%. The International Monetary Fund (IMF) has further forecasted a possible decline in the growth rate.
He stated that the Government of India has a long-term blueprint for economic development. It aims to enhance the GDP growth rate and increase per capita income. The government envisions India transitioning from a middle-income country to a high-income country by 2047. At the same time, another major goal is achieving net zero emissions by 2070. The government also aims to reduce greenhouse gas emissions to 2005 levels by 2050.
Prof Raj pointed out that these two policy goals—economic growth and environmental sustainability—often contradict each other. However, the budget attempts to create a balance by allocating resources and introducing various programs. These initiatives address climate change, environmental conservation, agriculture, industry, transportation, and urban development. He emphasized that urban areas play a crucial role in mitigating greenhouse gas emissions.
He appreciated the budget’s focus on key mitigation programs. The production of lithium batteries for electric vehicles has been prioritized, and customs duties have been reduced. The promotion of nuclear power has also been given importance. Additionally, several mitigation programs have been introduced in the agriculture sector.
Prof Raj noted that the Union Budget aims to achieve sustainable development by focusing on both mitigation and adaptation strategies. However, he pointed out a significant imbalance. The budget gives higher priority to mitigation over adaptation. While technological solutions like electric vehicles and solar energy are being promoted, the importance of forests, biodiversity, water bodies, and other natural resources in absorbing greenhouse gases must also be recognized.
The budget has increased its allocation for environmental programs from ₹3,330 crores to ₹3,412 crores, reflecting a 2.5% rise. However, concerns remain. Coal and thermal energy production will continue alongside mitigation efforts. Recent reports from the Forest Survey of India indicate a decline in forest cover, both in quantity and quality.
Prof. Raj raised a critical question. Are electric vehicles and solar energy truly sustainable solutions? He explained that electric vehicle charging still relies heavily on thermal coal-based power. While this may reduce pollution in urban areas, it does not eliminate overall emissions. The same applies to solar energy, which generates heat and has other environmental impacts.
He concluded by stating that technological solutions alone are not enough for effective climate action. Natural solutions, such as preserving forests and biodiversity, should also be prioritized. He welcomed all panelists to discuss the budget allocations, policy approaches, and the way forward.
Prof Shyamala Mani’s Insights on the Budget’s Environmental Focus
Prof Shyamala Mani began her discussion by agreeing with Prof. Raj’s views. She stated that this budget focuses more on economic growth. Many have commented on GDP growth and fluctuations. She examined the budget to see if it addresses current global challenges. However, she found that while some relevant items are included, the budget does not fully reflect India’s unique environmental concerns.
She noted that if the budget includes anything related to the environment, it is primarily focused on mitigation. However, continuing subsidies for fossil fuels makes it difficult for renewable energy to grow. She acknowledged programs like the Surya initiative for households. However, she questioned whether such efforts would significantly contribute to meeting the government’s energy targets.
Prof Mani also discussed the push for nuclear energy. She pointed out that past projects have struggled due to land acquisition challenges and waste disposal issues. Similar concerns arise with mining for minerals like lithium. The budget includes a strong focus on mining, but it lacks a clear assessment of its environmental and social impacts. She emphasized the need for proper infrastructure and compensation mechanisms when implementing large-scale energy projects.
She also observed a reduction in funding for wind energy. Last year, there was a push for biomass-based programs, but this year, there is little mention of such initiatives. Despite the promotion of electric vehicles and battery production, the budget does not integrate efforts to support electronic waste recycling. She noted that previous budgets emphasized recycling rare earth materials. However, this year, there is no significant focus on linking renewable energy with waste management.
Prof Mani also highlighted the absence of employment-related measures in the budget. She pointed out that urban sectors such as waste management could provide jobs if properly linked with skill development programs. She mentioned the concept of a “just transition,” where renewable energy efforts could create employment opportunities for waste workers. She noted that despite various urban programs initiated in the past decade, there is a lack of integration in this budget.
She also touched on the Jal Jeevan Mission and water-related schemes. She found that many programs remain disconnected. She raised concerns about the growing impact of climate change. State governments are increasingly worried about heat waves, floods, and droughts. She mentioned states like Tamil Nadu, Kerala, Odisha, and Assam, where climate-related disasters disrupt sanitation and water access.
Prof Mani stressed that India has now surpassed a 1.5°C rise in temperature. Adaptation measures should be a key priority alongside mitigation. She expected the budget to allocate more funds for disaster prevention, rehabilitation, and resilience-building. She concluded by emphasizing the need for stronger government support to safeguard vulnerable communities.
Mr Soumya Dutta’s Insights on Environmental Concerns and Policy Gaps
Mr Soumya Dutta opened the discussion with a strong statement. He said that the government is not serious about the environment. He pointed out that the Ministry of Environment Forest and Climate Change has turned into a Ministry of Environmental Clearance.
He presented key figures to support his argument. While the ministry’s budget increased by 9 percent from the revised estimate, the original allocation saw only a 2.5 percent rise. With inflation at 5.35 percent, this means a real decrease in the budget. He highlighted that the current budget for the environment ministry translates to only Rs. 23.4 per person annually. This is concerning, given that 90 percent of Indians face high air pollution levels. Around 60 percent experience climate-related disasters each year.
Mr Dutta compared these figures to other budget allocations. The transfer of funds to Ladakh, with a population of around three lakh, is Rs. 4,692 crore. This amounts to Rs. 1.55 lakh per person. In contrast, the environmental budget remains significantly lower per capita.
He emphasized that air pollution remains a serious problem. A recent CPCB study found that out of 521 rivers, 320 were heavily polluted. He also pointed to the increasing number of cyclones. Over the past 15 years, the western coast has seen a 100 percent rise in cyclonic activity. Despite this, there is no allocation for issues like sea-level rise, coastal salinity, and land loss.
Another major concern was the impact of climate change on coastal populations. Around 15 to 16 percent of India’s population lives in coastal areas. They face increasing risks due to ocean acidification, rising temperatures, and extreme weather events.
Mr Dutta addressed India’s economic goals. He challenged the government’s target of becoming a high-income country. The current per capita income is $2,700. The entry-level for a high-income country is $14,000. He stated that achieving this in the next two decades would require over 10 percent annual GDP growth. The current growth rate is around six percent, which he argued is not enough. He also spoke about the energy sector. The budget has increased funding for nuclear energy. However, he pointed out that nuclear power is expensive and polluting. The cost per megawatt is much higher than solar or coal energy. He also mentioned that nuclear plants release radioactive gases and waste as part of normal operations.
On renewable energy, Mr Dutta noted that India has not yet begun a real transition. Fossil fuel use is still increasing. While renewable energy is growing, it is only meeting additional demand, not replacing fossil fuels. He stressed the need for stronger adaptation measures. Vulnerability mapping of high-risk areas should be a priority. State Climate Action Plans remain unfunded and inactive. He urged for immediate action to support climate resilience at the state level.
The discussion ended with a call for better policies and higher budget allocations for climate adaptation and environmental protection. The participants agreed that urgent steps are needed to address these challenges.
Mr Debadityo Sinha’s Insights on Environmental Policies and Budget Allocation
Mr Debadityo Sinha began the session by agreeing with Soumya Dutta. He emphasized that while the ministry’s mandate includes environmental conservation and climate action, its actual implementation needs evaluation. One way to assess this is by analyzing budget allocations and expenditures.
He pointed out that in the past two years, a significant portion of the allocated budget remained unspent. The government’s policy direction and recent amendments in environmental laws have prioritized economic growth. The focus has shifted towards ease of doing business and corporate profitability. However, companies’ performance in income and employment generation has not been satisfactory.
Mr Sinha highlighted that wildlife conservation has suffered due to underutilization of funds. Last year, a large portion of the budget for conservation remained unspent. He mentioned the need to address emerging environmental threats such as coastal erosion and forest fires. Despite their growing impact, these issues do not receive adequate attention.
He expressed concern over the low spending on forest fire management. Out of the allocated 50 crore rupees, only 36 crore was utilized. Similarly, the Coastal Mission received 50 crore rupees, but only 8 crore was spent. This year, the allocation has further reduced to just 2 crore rupees. He questioned the government’s priorities, especially given the increasing environmental challenges.
He also spoke about the National Tiger Conservation Authority (NTCA). While its jurisdiction has expanded, the allocated budget remains underutilized. The Integrated Development of Wildlife Habitats has also received limited funding. However, some areas have seen significant investments. The budget for grid-based solar energy has nearly doubled, indicating a strong push for renewable energy.
Mr Sinha recalled last year’s introduction of the Green Hydrogen Mission as an alternative fuel for transportation. However, budget documents reveal that only 50 percent of the allocated funds were utilized. The progress on large hydropower projects has also slowed. He pointed out that hydropower projects have serious environmental and livelihood impacts, making solar power a better alternative.
He expressed concern over the government’s emphasis on GDP growth. He explained that GDP only measures production and does not consider environmental and social costs. The increasing focus on consumerism reduces efforts toward conservation. He also noted that while the budget for eco-tourism projects has increased, funds for ecosystem conservation have remained underutilized.
Mr Sinha also discussed the recent Forest Amendment Bill. This bill allows states to develop commercial projects inside forest areas. He mentioned the proposed ‘Zoo Safari’ projects and criticized the move to commercialize forest lands. He noted that these projects would lead to large-scale developments rather than small-scale conservation initiatives. The amendment is currently being challenged in the Supreme Court.
The session concluded with a discussion on balancing economic growth and environmental conservation. The speakers emphasized the need for better policy implementation and responsible budget utilization.
Ms Prarthana Borah’s Insights on Decarbonization and Manufacturing
Ms Prarthana Borah shared insights on the budget from an industry perspective. She highlighted that this budget is driven by decarbonization goals. It is not just about environmental concerns but focuses on making industries more competitive globally. She emphasized that the shift towards renewable energy is slow. Between 2021 and 2022, the percentage of renewable energy use in the top 250 listed industries increased from 5% to 9%. This growth is minimal.
She pointed out that the industry is facing challenges in accessing renewable energy sources. These include hydrogen, solar, wind, and hydro power. The expansion of nuclear capacity is a response to industry needs. India has committed to achieving net zero by 2070. However, global pressure is pushing the country to advance its targets. India also aims to take a leadership role in renewable energy. The transition to renewables is driven by industrial decarbonization rather than environmental protection.
Ms Borah described the budget as pro-manufacturing. She explained that increasing global regulations are monitoring industries more strictly. Small and medium enterprises (SMEs) struggle to compete in global markets. The budget supports domestic manufacturing to make Indian products more competitive. There are allocations for startups and SMEs to develop better products. The hope is that this will lead to clean technology and energy transition. However, the industry must ensure proper implementation.
She warned that without these measures, small industries could face significant challenges due to global regulations. She also spoke about waste management. The budget uses industrial terms and focuses on circularity. Ship recycling received a separate mention. This aligns with global efforts to decarbonize the ship industry. It also connects with India’s plans to decarbonize the steel sector. These steps are part of the strategy to meet the 2070 net zero goal. India’s timeline differs from global targets set for 2030 and 2045.
A positive aspect of the budget is the allocation for the drinking water mission. Industries are increasingly concerned about water security. Many companies aim to become water-positive. The government’s focus on water security aligns with these industry concerns. However, Ms Borah criticized the budget for cutting funds for biodiversity and nature conservation. She noted that global trends prioritize nature conservation. The budget misses an opportunity by reducing financial support for this sector.
Her remarks provided valuable insights into the industrial implications of the budget. She highlighted both opportunities and gaps that need attention.
Mr Himanshu Shekhar’s Highlights Environmental Concerns
Mr Himanshu Shekhar initiated the discussion by addressing the extensive coverage of the budget. He noted that most of the focus remained on personal income tax rate restructuring. This shift in attention diverted discussions from more critical issues.
One key highlight was the budget allocation for the Ministry of Environment. The allocation saw a 9% increase. Last year, the Finance Minister allocated ₹3,330 crore. However, the revised figure stood at ₹3,125 crore. This year, the allocation has risen to ₹3,412 crore. This increase is crucial for India’s fight against climate change and sustainable governance.
Mr Shekhar also interviewed Sanjay Agarwal, Chairman of the Central Board of Indirect Taxes and Customs. Mr Agarwal emphasized that the budget focuses on green mobility transition. The customs duty on lithium-ion cells has been reduced or removed. The government aims to cut costs for battery manufacturing for mobile phones and electric vehicles. This move aligns with India’s vision of becoming a global manufacturing hub.
The budget also introduced a National Mission on High-Yielding Seeds. This initiative includes the development of climate-resilient seeds. Mr Shekhar highlighted the struggles of farmers in regions like Bundelkhand and Modinagar. Changing weather patterns have made farming difficult. The new mission aims to help farmers adapt.
The push for clean technology manufacturing also gained attention. The government is prioritizing the production of solar PV cells, EV batteries, and motors. The goal is to accelerate India’s transition to green energy.
Among all sectors, solar energy received the highest allocation of ₹26,549 crore. The focus remains on rooftop solar under the PM Suryodaya Yojana. The announcement of a nuclear mission also aims to generate 100 GW of non-fossil fuel energy by 2047.
Despite these initiatives, some concerns remain. Financial support for climate adaptation is still lacking. Every year, the government announces measures to tackle pollution, particularly during the winter season. However, there was no clear budget allocation for helping farmers reduce stubble burning. Parali management remains a major issue in Punjab, Haryana, Uttar Pradesh, and Madhya Pradesh. River rejuvenation was another missing point in the budget. Pollution in the Yamuna River is a major concern. However, no significant emphasis was placed on addressing this issue.
Mr Shekhar pointed out that adaptive technologies and financial subsidies are necessary. Farmers need affordable alternatives to stubble burning. The government has mentioned subsidies in past court affidavits. However, the budget lacked specific financial commitments for this. Air pollution, river pollution, and climate adaptation funding were among the key concerns raised. The budget debate has now begun in the Lok Sabha. The discussion is set to continue in the Rajya Sabha. Many amendments and questions are expected in the coming days.
Mr Shekhar also highlighted the increasing frequency of climate-related disasters. In the past year, India experienced an unprecedented heat wave. The temperature in the Mewat region near Delhi-Haryana touched 55.6°C. Though the Indian Meteorological Department later withdrew this figure, the extreme heat was undeniable.
The year 2024 has been recorded as the hottest year on Earth. Farmers have struggled due to erratic weather patterns. The rising intensity of disasters remains a serious concern. Mr. Shekhar hopes for a more informed discussion on climate resilience. He emphasized the need for strong policies and continued action. The budget debate will be crucial in addressing these pressing environmental challenges.
Acknowledgement: Sana Ansari, a visiting researcher at IMPRI, is currently pursuing her first year of a Master’s in Public Policy at St. Xavier’s College, Mumbai.
IMPRI’s 6th Annual Series of Thematic Deliberations and Analysis of Union Budget 2025-26
The Environment and Union Budget 2025-26
