India announces new clean energy funds in budget 2023-24

New Delhi: Finance minister Nirmala Sitharaman announced several new clean energy initiatives in India’s annual federal budget speech Wednesday, saying “green growth” is a top priority for the country.

More than $8 billion dollars were announced for projects like mangrove restoration in coastal regions which help suck carbon dioxide out of the atmosphere, converting waste into biogas and speeding up renewable energy initiatives.

Sitharaman said the injection of $4.3 billion into India’s energy transition will be channeled through the ministry of petroleum and natural gas to help India reach its goal of net zero emissions by 2070.

The new funds form part of the government’s $550 billion budget aimed at ramping up spending to spur economic growth and create jobs ahead of the general election next year. Sitharaman mentioned the scaling up of clean energy for the economy and jobs within the first few minutes of her speech.

Sitharaman also proposed government incentives for energy storage systems in India that would aid round-the-clock renewable energy use and announced a new framework for pumped storage systems for hydropower.

She set out an additional $2.5 billion to facilitate new clean energy production in the Himalayan region of Ladakh, where electricity grid infrastructure remains a key sticking point. Other programs to incentivize the use of alternative, less-polluting fertilizers and to cut down on chemical fertilizers were also announced.

Import taxes for components required to produce lithium-ion batteries, a key component in many electric vehicles, will be slashed, Sitharaman said. But no exemption was provided for protective taxes in the solar power sector.

The move toward clean energy and away from fossil fuels has increasingly become a priority for India and nations around the world as countries try and limit global warming.

India’s economy is projected to grow 7 percent in the fiscal year ending in March. The government forecasts growth of 6-6.5 percent next year. The country’s population is expected to overtake China’s in size this year, and its economy last year surpassed that of the United Kingdom to become the world’s fifth largest.

According to the Center for Monitoring Indian Economy, the unemployment rate stood at 8.3 percent in December, up from 6.5 percent in Jan 2022. The government is aiming for a budget deficit of 5.9 percent of India’s gross domestic product for the 2023-24 financial year, lower than the 6.4 percent for this fiscal year.

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