Budget 2025 increases allocation to green energy by 53%

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Finance minister Nirmala Sitharaman has raised by Rs 9,251 crore the allocation towards new and renewable energy in the Budget for 2025-26 to Rs 26,549 crore, as the country steps up efforts to move away from fossil fuels and make a transition to clean energy.

The increase in allocation was expected, as Moneycontrol wrote on January 22 that the Union Budget's allocation to the sector was likely to increase by Rs 10,000 crore, with the PM Surya Ghar scheme getting the biggest share to meet the target of 50 lakh rooftop solar installations by March 2026.

The Budget, presented on February 1, gives a renewed push to the PM Surya Ghar: Muft Bijli Yojana, which aims to harness solar power to help meet India's energy needs.

For FY25, the ministry of new and renewable energy (MNRE) was allocated Rs 17,298 crore in the revised estimate (RE) and in 2023-24 the outlay was Rs 7,848 crore (revised estimate).

For FY26, the Budget saw extensions of flagship schemes, which include PM Surya Ghar, Green Energy Corridors (GECs), PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan), Renewable Energy Parks (solar power - grid) and the National Green Hydrogen Mission.

For FY26, Rs 600 crore has been kept aside for green energy corridors (GECs), meant for evacuation of renewable energy and integrating it with the national grid. GECs had received the same amount in the FY25 revised estimate.

The PM-KUSUM scheme (Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan) got Rs 2,600 crore for FY26, against Rs 2,525 crore (RE) in FY 25. PM-KUSUM is one of the largest initiatives in the world to provide clean energy to more than 35 lakh farmers by solarising their agriculture pumps.

The government's flagship rooftop solar scheme - PM Surya Ghar: Muft Bijli Yojana - received additional impetus in the Budget for the financial year 2025-26. Funds to the scheme have been increased by 80 percent to Rs 20,000 crore in the Union Budget 2025 from Rs 11,100 crore (revised estimate).

The National Green Hydrogen Mission received Rs 600 crore, compared to Rs 300 crore (RE) in FY25.

Approved on January 4, 2023, the green hydrogen mission aims to make India a leading producer and exporter of green hydrogen with an annual production of 5 million metric tons by 2030.