Dr. Arvind Kumar*
India’s goal to become the third-largest economy by 2030 conflicts with its commitment to environmental sustainability, particularly its pledge to achieve net-zero emissions by 2070. While the Union Budget 2025 and economic survey acknowledge this challenge, they show a significant gap between the ambitious targets and the funding allocated. India must address this discrepancy by overhauling its policies and implementing strategic measures. As a developing nation, India faces the demanding task of aligning economic growth with environmental protection and achieving broader Sustainable Development Goals. The delicate balance between economic growth and environmental well-being in India raises critical concerns: How can India effectively balance economic development with ecological health? Are existing measures sufficient to protect India’s vital rivers from pollution? How should the government allocate funds to address the most urgent environmental challenges in light of severe climate change predictions? How can community involvement be effectively leveraged to tackle complex environmental issues? Addressing these questions is essential for India’s sustainable future.
Insights from the Economic Survey 2024-25
The Economic Survey 2024-25 presents a comprehensive picture of India’s progress towards environmental sustainability while maintaining economic growth. The survey identifies climate-resilient agriculture as an urgent necessity because the agricultural sector achieved 5% average growth from 2016-17 through 2022-23 so it urges efforts to build climate-adjusted plant varieties and disease-resistant high-yielding seeds. The focus becomes essential because the survey’s findings reveal both food price inflation patterns alongside vegetable crop vulnerability to weather conditions thus showing an urgent requirement to combine food security measures with environmental conservation.
The survey reveals both essential spaces of weakness and prospects for India’s sustainable progression path. The current ratio of R&D expenditure at 0.64% of GDP indicates major potential for advancement regarding environmental innovation and sustainable technologies. Institutions overseeing infrastructure development will benefit from enhanced capital expenditures from 2019-20 to 2023-24 resulting in green development possibilities due to advanced financial models alongside private industry ventures. A more balanced approach towards sustainable industrial development should be implemented to ensure environmental stability throughout India since industrial growth is heavily concentrated in just four states accounting for 43% of industrial gross state value added.
Budget 2025: Sustainability Prioritized?
Environmental sustainability forms a fundamental strategic directive in the Union Budget 2025-26 as the government has introduced specific funding mechanisms and regulatory frameworks. The government places primary importance on energy transition through its Rs 20,000 crore funding project which supports small modular reactor development under the Nuclear Energy Mission. Nuclear energy development is now possible because of essential changes introduced to the Atomic Energy Act together with important modifications to Civil Liability for Nuclear Damage Act which welcomes private sector participation (SDG 7). The budget offers states financial motivation through additional GSDP borrowing capacity of 0.5% for implementing electricity distribution reforms and augmenting their transmission systems across the state.
To advance Sustainable Development Goal (SDG) 9,the Urban Challenge Fund worth 1 lakh crore rupees addresses city development projects. The budget supports sustainable development in agriculture by funding PM Dhan-Dhaanya Krishi Yojana for improving productivity and diversification across 100 low-productivity districts. The PM Surya Ghar Muft Bijli Yojana received Rs 20,000 crore which became an 80.2% increase from the revised estimates of 2024-25 to show the government’s grassroots-level dedication to renewable energy.
A green pledge
The Union Budget 2025-26 emphasizes India’s dedication to sustainable development by aligning with the UN’s Sustainable Development Goals (SDGs). Funding for economic growth (SDG 8) and support for entrepreneurs (SDG 10) has increased significantly, reducing inequality. Investments in clean water and sanitation (SDG 6) has increased with a budget of Rs 67,000 crore for the Jal Jeevan Mission. Sustainable cities (SDG 11) has received Rs 78,126 crore under the Pradhan Mantri Awas Yojana. The budget supports education (SDG 4) and healthcare by adding 10,000 medical seats and funding research fellowships, contributing to both quality education and improved health outcomes (SDG 3).Furthermore, sustainability will be advanced in waste management through eco-friendly packaging, e-waste recycling, and bio-energy production, aligning with the principles of a circular economy. India’s agricultural sector will leverage advanced technologies such as precision farming, AI-powered crop monitoring, and efficient water management to enhance food production while minimizing environmental impact. These sustainable practices will create abundant employment prospects, with the renewable energy sector alone offering over one million jobs. Upgraded irrigation systems and financial assistance will benefit rural communities, while research initiatives will foster innovation in green energy and environmental science, contributing to India’s knowledge-based economy and investments across diverse development sectors contribute to an inclusive society that adheres to SDG principles.
A missed opportunity?
Despite the Union Budget 2025 being presented as innovative, it appears to address critical issues like climate change and sustainability superficially. While the budget allocates a modest 2.5% increase to environmental funding, coal funding has seen an alarming 160% rise, and oil and gas have received a 21% boost. Although solar energy receives a significant allocation of ₹26,549 crore, this amount still seems inadequate given the potential 25% GDP loss due to climate change by 2070. The apparent disconnect between our ambitious climate commitments, such as a 45% emissions reduction by 2030 and net-zero by 2070, and the lack of a robust carbon market raises concerns about India’s ability to effectively tackle these challenges. Our environmental woes are piling up: polluted rivers (like the Ganga and Yamuna), unhealthy air that requires masks, and fragmented climate action among government agencies. What’s particularly interesting is how this situation is part of a larger global issue- with potential protectionist policies from the US, we may seek closer ties with the EU, which has taken a proactive stance on climate change. However, our biggest concerns lie in not having a strategy for reducing emissions from industries, implementing carbon pricing, or enforcing environmental, social, and governance (ESG) regulations. Without these essential measures, our climate pledges risk remaining empty promises. To effectively address climate change, we must prioritize building a solid foundation. This requires implementing interconnected policies, securing substantial funding, and actively involving communities. Each individual can contribute, such as advocating for river protection, supporting renewable energy funding, and making eco-conscious choices. The government cannot solely carry this burden. Given the potential 25% GDP loss due to climate change, we cannot afford to implement half-hearted measures.
Way Forward
India’s sustainability and economic development plan faces obstacles such as bureaucracy, lack of skilled workers, funding issues, and slow adoption of green technologies. However, addressing these challenges is possible. By updating methods for assessing sustainable projects, expanding training programs, providing financial support for eco-friendly businesses, improving carbon credit rules, incentivizing renewable energy, and enforcing stricter environmental standards, India can accelerate its transition to a greener economy. Technological advancements, such as AI-managed smart grids and precision agriculture, will also drive market changes and increase resource efficiency. Collaborations between governments, businesses, and researchers through Public-Private Partnerships (PPPs) are vital for accelerating the adoption of renewable energy, developing sustainable infrastructure, and managing waste. India can maximize the success of PPPs by involving multiple stakeholders, boosting research and development (R&D) funding, and reforming policies to attract private investment. Capacity building and decentralized governance are crucial to address industrial concentration. Civil society engagement is essential for transparency and promoting behavioural changes. Integrating sustainability into all economic sectors can create numerous green jobs and establish India as a climate-conscious development leader, aligning its 2047Viksit Bharat vision with both planetary health and inclusive prosperity.
*Editor, Focus Global Reporter
