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India's Economic Survey Emphasizes Climate Action as an Economic Priority

India’s Economic Survey for the third consecutive year features a dedicated chapter on climate action, signaling that climate change is no longer a peripheral issue but central to the country's economic planning. This shift highlights India’s growing commitment to tackling climate challenges, with a focus on long-term resilience and sustainable development.

However, despite India’s progress, the global climate finance landscape remains problematic. The international climate finance target is set at $300 billion annually by 2035, but the actual requirement to address global needs is between $5.1 and $6.8 trillion by 2030—creating a significant financial gap. Developing nations, such as India, bear a disproportionate share of this burden, which underscores the need for more equitable global climate finance.

India is actively working to mitigate the impacts of climate change through several strategic initiatives. The country is in the process of developing its National Adaptation Plan (NAP), which outlines critical measures to safeguard its population. Key projects include:

• AMRUT Mission: Completion of 785 stormwater management projects, preventing flooding at 3,631 waterlogging points.
• MISHTI Initiative: Restoration of 540 sq km of mangroves by 2028 to absorb 4.5 million tons of CO? and protect shorelines.
• FloodWatch India App: Provides real-time flood alerts for early warnings, contributing to disaster reduction efforts.

These initiatives underscore India’s vulnerability to climate change and the urgent need for climate adaptation strategies.

In terms of energy transition, India faces unique challenges. The country is increasing its renewable energy capacity, with solar leading at 20.6%, followed by wind (10.5%), and hydro (10.3%) as of November 2024. To meet global energy standards and improve its Human Development Index (HDI), India will need to significantly increase per capita energy use, which stands at 16.7 gigajoules per capita in FY23. Major projects are underway to drive this transformation, including:

• PM Surya Ghar’s Muft Bijli Yojana: Aiming for 1 crore rooftop solar installations to make clean energy more accessible.
• Offshore Wind Projects: In Gujarat and Tamil Nadu, with ?7,453 crore in funding.
• Exploration of Nuclear Energy: Addressing challenges related to integration, waste management, and efficiency.

These projects represent substantial progress, but scaling up renewable energy is a critical challenge for the future.

The financial aspect of climate action remains a major concern. India’s green bond market has shown significant growth, from ?6,128 crore in FY22 to ?20,000 crore in FY24. The Reserve Bank of India (RBI) is also stepping in with green deposits and priority lending for renewable energy projects. On a global scale, increasing sustainable finance could potentially save $440 billion by 2030.

In conclusion, India is not just focusing on environmental issues but treating climate action as an economic priority. While the country is making substantial strides in climate adaptation and energy transition, the gap in global climate finance remains a major hurdle that needs to be addressed urgently for effective action.