CSE finds no strategy in budget 2015 for addressing environmental issues

March 09, 2015

  • Cess on coal inadequate in cutting emission

  • Policy on mobility and transportation, critical for reducing air pollution, not in place

  • Rising air pollution levels not addressed – no additional taxes on diesel cars and SUVs proposed; promoting electric vehicles will not reduce pollution in less than 10 years

  • No apparent strategy in Clean Ganga Fund or Swachh Bharat Abhiyan 

  • Funds of Environment and New and Renewable Energy Ministries cut

New Delhi, March 2, 2015: Centre for Science and Environment (CSE) in a statement said on Monday that the budget presented by the central government does not aim to address environmental issues in a strategic manner. Not only does the budget lack a strategy to salvage the worsening state of environment, it also lacks perspective.

Increase in cess on coalbr /> CSE director general Sunita Narain said that perhaps the only “green initiative” of the budget was the increase in cess on coal—from Rs 100 to Rs 200 per tonne. A five-fold increase in the cess would equalise price of domestic coal with international prices and would contribute to annual CO2 emission reduction of 214 million tonne, which is 11 per cent of India’s annual emissions. “However, in budget 2015, the finance minister has opted to take the slow road and has doubled the cess on coal to balance the need to tax pollution and the price of power in his words,” she said.

Tax on fuels
Narain also said that while the government had increased the tax on fuel, it would be important to maintain the “carbon tax” even when the price of petrol and diesel increased in the international market. She added that to ensure that people move away from private to public transport, there should be adequate investment in infrastructure “to wean us away from cars”. 

She said, “What is bad is that budget 2015 is doing the re¬verse. It says it will set aside Rs 4 per litre of the excise duty on petrol and diesel for a dedicated road cess. This tunnel vision of viewing infrastructure for transport as just “roads” is regressive. Instead, the need is to reinvent mobility so that it moves goods and people, and not vehicles. The fact is that budget 2015 has recognised that this excise duty is a car¬bon tax, which is putting a price on each tonne of CO2 emitted. Now this tax must be used to help shift to less carbon-intensive ways of production,” she added.

Narain also said that although the government was no longer subsidising diesel, its price remained lower than that of petrol mainly because of differential levels of taxation. “So, 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 ve¬hicles to equalise the price differential.”

Pollution and health
CSE deputy director general Chandra Bhushan said the Union budget indicated the thinking of the government on major public policy issues. “If that is the case, then there are many areas of public health and environment protection where either the government is not thinking much or is not thinking right,” said Bhushan.

Drawing attention to the problem of air pollution in the country and its capital Delhi which has been declared as the most polluted city of the world, Bhushan said Finance Minister Arun Jaitley said nothing about reducing air pollution except promotion of electric vehicles. “This is not going to make a dent in the pollution levels in the next 10 years at least. He had no proposal on improving our vehicle emissions control technologies or taxing polluting big diesel SUVs, promoting public transport or improving fuel quality. These are the most basic things that we will have to do to clean the air in our cities.”

With reference to pollution, Narain said, “We also know that the health costs of air pollution are very high. Budget 2015 does little to address this concern. It does not say that the excise duty collected on dirty fuel will be used to upgrade refinery technology so that we can get clean fuel and breathe easy.”

Clean Ganga Fund
CSE stated that the budget had no concrete proposal to clean India’s rivers, including the Ganga. “The fact is about 90 per cent of sewage generated from cities are discharged untreated into our rivers – this is the main cause of pollution. To deal with this, we need massive investments in infrastructure to collect, transport and clean sewage and recycle and reuse it,” said Bhushan. “In place of this, the finance minister offered not a strategy but 100 per cent deduction for contribution to the Clean Ganga Fund, which will not be sufficient to deal with the challenges facing Ganga, leave alone other rivers of the country,” he added.

Swachh Bharat
While the Swachh Bharat Abhiyan has been given attention by the Finance Minister and a 100 per cent rebate for contributions has been proposed apart from a Swachh Bharat Cess at a rate of 2 per cent or less on all or certain services. “The only proposal he mentioned is to build 60 million more toilets – which is eminently important – but we need more than toilets to make India swachh (clean),” said Bhushan. He added that the Finance Minister should have announced something on garbage management “as the country currently is drowning in its own garbage, but he didn’t.”

“The bottom-line is, be it air pollution, water pollution or municipal solid waste, managing environmental degradation requires massive investments in infrastructure. These are the core infrastructure that will improve the health and well being of the poor who are disproportionately affected by environmental degradation. Unfortunately, though the finance minister voiced these sentiments, he could not deliver on them.

Funds of Environment and New and Renewable Energy Ministries cut
CSE pointed out there was a mismatch between the intentions expressed in the budget speech and budget allocations. Bhushan said while the Finance Minister mentioned a massive increase in the renewable energy capacity of 1,75,000 MW to be achieved by 2022, this year budget allocation for the Ministry of New and Renewable Energy has actually been reduced by about 7 per cent from the previous year. Similarly, the budget for the Ministry of Environment has been reduced by 15 per cent from 2014-15 levels, despite the fact that India needs serious upgradation of technology and capacity in environmental monitoring, planning and management.

Utilising NCEF funds
Bhushan said the Clean Energy Cess will bring in about Rs 7,500 crore every year in the National Clean Energy Fund (NCEF). “In the past, NCEF has not been used appropriately. This time, however, the finance minister will have to walk the talk. If he is putting additional cess on coal, then it should be utilised for cleaning the existing and upcoming coal-based power plants and for renewable energy. We can’t keep collecting cess in the name of clean energy and environment and not use them,” he said.

Rural development/other allocations
CSE also noted that the total budgetary allocation for rural development this year was the lowest in the past three years. This cut comes at a time when most villages are witnessing reverse migration that has resulted in a three-per cent dip in rural wage growth and a huge backlog of unpaid salary under Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). It also observed that chronic drought was becoming a way of life in the Marathwada region of Maharashtra with successive budgets, Central and State alike, having failed to address this region’s chronic water insecurity.

In conclusion
 “We do appreciate the initiative of the government in focusing its attention on water efficiency, soil health and organic agriculture. The support to organic farming (Paramparagat Krishi Vikas Yojana), water efficiency (Pradhanmantri Gram Sinchai Yojana) and allocation of Rs. 5,300 crore to support micro-irrigation and watershed development, will go a long way in making our agriculture more efficient and sustainable. We need programmes like these in all sectors of the economy to make development truly clean and green,” said Bhushan.


For further information, please contact Anupam Srivastava, asrivastava@cseindia.org , 99100 93893