Budget 2022 | To boost economy, India needs a green Budget

(File image: Reuters)

Budget Day in India now has the kinetic frenzy of what used to be the cattle trade fair day in rural India; tons of unrestrained festivity and oodles of colourful demonstration of precious wares in a crowded marketplace.

The cattle was all dressed up, including wearing embroidered clothing, fake jewellery and washable tattoos. The cows and buffaloes were paraded as if they were centre-pieces in a marriage procession. At the end of the day, what remained were some exuberant faces simply savouring the environment, a few woebegone souls, others usually indifferent, with the residual looking buoyant about their great purchases. Or sales.

A year later the entire multitude returned for the same tamasha and trade. It was always a breath-taking assembly.

India’s annual announcement in Parliament of its economic health every year, and its projected growth for the next is not dissimilar. There is the usual photo-ops with the Finance Minister masquerading a fictitious smile, TV channels hyperventilating about the hidden content in that top-secret folder, several talking heads wearing Saville suits uttering platitudes, the middle-class anxious about the dreaded Damocles sword called income-tax.

The Finance Minister’s speech traditionally has some Urdu couplets or classical poetry thrown in to thumping applause. Of course, there is Dalal Street, where the bulls are always ready for a wild run. Or transform abruptly into bears if miffed.

These boilerplate banalities apart, this year’s budget for Y22-23 to be announced by Finance Minister Nirmala Sitharaman on February 1 is important for innumerable reasons. Let me focus on two of them; the economic devastation caused by the ongoing pandemic (the Omicron wave has pulverised the world just when it was beginning to look buoyant), and the imminent catastrophe awaiting humanity on account of Climate Change.

India’s GDP collapse was astronomical following COVID-19, dropping to a debilitating -7.3 percent, a historic low in Y20-21. While there is a perceptible recovery thereafter, the promised V-curve has remained an elusive mirage.

Now a GDP is not just a statistical number to please foreign investors, it reflects a nation’s ability to uplift millions below the poverty line. A falling GDP accentuates misery, pushing even borderline emerging neo-middle class into deep penury. The figure was a staggering 230 million. This is India’s disconcerting truth that rarely gets prime space.

On the Global Hunger Index India ranked at 101 out of 116 countries in Y2021. For a country that boasts of several billionaires in the Forbes Top 10 this was palpably unconscionable. Income inequality has worsened in India. The latest Oxfam report is a damning indicator. The Finance Minister must, therefore, in this budget alleviate the rising India-Bharat divide through basic minimum wages, MNREGA pay-outs, assured farm income for small/marginal category (if not MSP’s), unemployment allowance, wider coverage of public health (we must be ambitious enough to start our own version of the National Health Service model of the United Kingdom), incentivise MSMEs, and create a robust public-private model for sector-wise net job creation (not just skilling, which has been a doomed project).

The fiscal deficit should not be treated as a stumbling block (rising oil prices, inflationary trends notwithstanding); remember, growth in consumption demand will also work as a force multiplier to absorb that through higher output (investment).

At COP26 in Glasgow, Scotland, India made some aggressive commitments including net-zero emissions by 2070, and sizeable reductions by 2030. Politicians worldwide are not taken seriously on the imminent catastrophe awaiting humanity: Climate Change. They are perceived to be myopic; all they can think of is the next election. That is a truism.

India (7 percent of global emissions) is among the world’s top four carbon dioxide emitters. We have nine Indian cities among the world’s 10 topmost polluters. Water contamination, plastic usage, disappearing forest covers, excessive coal-producing plants, decongesting cities, improving sewage, etc. are rarely on the politician’s menu card. Political parties are blithely nonchalant about our future generations, treating Climate Change as an urban fad, a liberal elite obsession, and a woke chattering class fantasy. That is a dangerously flawed assumption.

I am sure the Finance Minister is aware that it is the poor farmers who suffer the most on account of greenhouse gas emissions which eventually lead to droughts, floods and famines, leading to mass migration and human suffering. With 70 percent of Indians living in the rural hinterland, there is a lot to be worried about. The time for lip service is over. The clock is ticking.

Past budgets have not done enough to reduce fossil fuel consumption. In this budget, the Finance Minister must step up. While the low-hanging fruits will be making EV’s affordable in the metropolitan cities to begin with (why is Elon Musk still struggling to get Tesla into India for three years?) and improvement in public transport, clean energy will require much more than that.

Although prices have come down for solar panels and wind turbines, are we deploying enough? If not, why? Have we abandoned the nuclear energy option altogether? The corporate sector has to be co-opted in the herculean task ahead, through a combination of tax breaks, financial incentives, and research and development, which is focused on delivering carbon-free energy. The budget must address the manufacturers of air conditioners (the highest contributors of home electricity expenses) and water-heaters, etc. It needs to address the entire ecosystem on Climate Change. Why can’t the government walk the talk and as the largest buyer, commit to purchasing 25 percent of only green goods and services? Why not only buy EV’s as part of the State’s fleet of cars?

If the Finance Minister’s budget increases basic living standards of those at the bottom of the pyramid, boosts consumption/investment demand, and has a substantive shade of green in it, it could propel up the real economy. That’s what India needs.

Sanjay Jha is former National Spokesperson of the Congress, and author of The Great Unravelling: India After 2014. Twitter: @JhaSanjay.

Views are personal and do not represent the stand of this publication.