Key Takeaways

Despite severe adverse weather events over the last eight months, the newly formed government’s Budget 2024 paid short shrift to the issue of climate change
While the Modi government’s 2023 budget emphasised sustainable and inclusive development, the 2024 budget largely sidestepped such initiatives
Climate experts and investors say the budget missed addressing energy transitions beyond solar, green financing, incentivising sustainable and green infrastructure, etc
Lack of government grants and subsidies are likely to impact private sector funding, particularly for startups, in a major way

As Finance Minister Nirmala Sitharaman delivered her budgetary address to Parliament on July 23, 2024, the situation in various Indian states was nothing short of apocalyptic.

Mumbai, the nation's financial heart, was under an ominous orange alert for severe flooding and unrelenting rains. Prime Minister Narendra Modi’s home state of Gujarat was being ravaged by flash floods that had already claimed 65 lives, and, just a few hundred kilometres from the parliamentary chamber, Haryana was gripped by panic over alarmingly below-average rainfall. This trend has only escalated since, with heavy rainfall in the southern state of Kerala leading to landslides this past week which have claimed over 300 lives.

Indeed, the writing has been on the wall for a while now. Between 2016 and 2021, climate change-induced events in India inflicted up to $159 billion in damages across critical sectors like agriculture. And the most affected were economically disadvantaged communities, who bore the brunt of these financial setbacks. However, despite adverse weather events becoming not just more frequent but more intense, Budget 2024 was oddly muted when it came to combating climate change—a key reason behind this worrying phenomenon.

This is quite the about-turn from 2023—a budget that was celebrated as India’s most ambitious green budget, with strong alignments on climate change policies, net-zero targets, and COP27 commitments. Even the interim budget just presented mere months ago provided incentives for alternative energy sources.