What India’s 2024 Budget Means for Climate Change and the Future of Food and Agriculture
India has released its annual Budget this week, with a climate finance taxonomy and spending on resilient crop varieties among the key takeaways for climate change and agriculture. This week, Indian finance minister Nirmala Sitharaman presented the country’s annual Budget for a record seventh consecutive year. It was also the first Budget announced by India’s NDA coalition government, which was re-elected for a third straight term in June, led by the Bharatiya Janata Party (BJP). Contrary to expectations, the BJP didn’t win an absolute majority on its own, let alone reach its predicted number of seats that would have given the right-wing party a supermajority in the party. After landslide victories in the previous two elections, that the BJP had to rely on coalition partners to form a government signalled a shift in the national sentiment. India voted against religious persecution, segregation and nationalism, rejecting the polarised environment cultivated by the ruling party in the last decade. But another huge factor was largely in the background: climate change. The six-week-long elections were held amid heatwaves in several parts of India, leading to record-high temperatures and dozens of deaths. Climate change was missing from candidates’ messaging, despite one of the biggest backlashes against the BJP’s tenure coming from farmers, a group even more adversely affected by the climate crisis. The finance ministry this week suggested that India’s annual per capita emissions are a third of the global average – but these have also risen by 93% since 2001. Its climate target (or nationally determined contribution) has been deemed “highly insufficient” by the Climate Action Tracker, with current policies and action rated as “insufficient” too. India is now the most populous country, and also the world’s third-largest polluter – it can’t afford to ignore climate change. In the Union Budget for the 2024-25 fiscal year, Sitharaman has allotted ₹3,265.53 crores ($390M) to the Ministry of Environment, Forest and Climate Change (MoEFCC), a 6% improvement on the ₹3,079.4 crores ($367.9M) set aside last year. As part of its efforts to meet its climate goals, India will also develop a climate taxonomy to classify economic activities in line with green commitments and broader environmental goals. “We will develop a taxonomy for climate finance for enhancing the availability of capital for climate adaptation and mitigation. This will support [the] achievement of the country’s climate commitments and green transition,” said Sitharaman. According to the UN Environment Programme, taxonomies provide clear science-based definitions, help avoid greenwashing, and help identify eligible assets, activities or projects that are low-carbon, align with climate-friendly economic development, or are environmentally sustainable. But while the move has been hailed by some, others have raised concerns about possible greenwashing. “India’s climate finance taxonomy could prove helpful and would be a move towards the ‘Paris alignment’ of finance in line with the goals of the Paris Agreement,” said Sehr Raheja, programme officer at think tank Centre for Science and Environment. “Whether the tagging of activities improves finance for climate or brings in risks of greenwashing remains to be seen after it is released,” he added. Aarti Khosla, director of consulting firm Climate Trends, said: “The budget lacks timelines for announcements on taxonomy, carbon pricing mechanisms and detailed strategies for mobilising climate finance for adaptation and mitigation efforts in vulnerable communities.” Additionally, the Budget allocated ₹220 crores ($26M) for the National Mission for a Green India, a 37.5% hike from last year. The initiative aims to preserve forest cover and protect citizens from the impacts of the climate crisis.
