Expecting sustainable growth from the union budget

Green hydrogen, solar power, and green energy corridors expect higher allocations, along with wind energy, to pick up pace next year.

As India prepares for the presentation of the Union Budget 2024, the focus is on reducing energy costs and promoting renewable energy adoption. The Modi-led government is expected to continue its focused approach towards the power and renewable energy sectors in the forthcoming budget announcements. The revival of old incentive-based policies and new production-linked incentive schemes are expected. Over the past decade, the government has consistently supported the power sector, fostering a favourable environment for investments and advancements in renewable energy technologies. 

Finance Minister Nirmala Sitharaman will present the Union Budget 2024 by the third week of July. The Finance Minister will consult representatives from the power and renewable energy sectors before the budget presentation. The budget has to pave the way for fostering economic growth and achieving a $5 trillion economy by 2047.

Green infrastructure and clean energy

Aditi Balbir, the co-founder of EcoRatings, emphasises that the 2024 Union Budget should prioritise investments in sustainable infrastructure projects and clean energy solutions. With 70% of greenhouse gas emissions originating from energy, industry, and buildings, focusing on these areas is essential. This investment is expected to create a future-proof foundation for economic growth and assist in achieving net-zero targets. 

Spread sustainability across industries.

Globally, 85% of institutional investors incorporate environmental, social, and governance (ESG) factors into their investment decisions, making ESG investments the emerging norm. The Union Budget has to extend industry recognition programmes to companies excelling in sustainability. This encourages wider adoption and fosters a more responsible business landscape beyond the financial sector.

The budget can introduce financial incentives, such as lower interest rates on loans and dedicated grants, for companies committed to ESG compliance. This establishes a clear link between sustainability efforts and economic benefits. Implementing mandatory Business Responsibility and Sustainability Reports (BRSR) for all companies will ensure consistent reporting on sustainability initiatives, promoting transparency and accountability.

Construction sector

The construction sector, a major driver of the economy, is currently facing a significant challenge: a shortage of skilled labour. Shantonu Ghosh, Senior Partner at Vector Consulting Group, notes, “The construction sector, a major driver of the economy, is going through ‘labour pains’. The shortage of skilled labour is a clear and present danger and it has to be recognised. This requires, in fact, urgent action. The government and the industry have to collaborate in building a public-private partnership model, establish a supply chain, and provide skilled labour to an industry that is set for exponential growth. Policy creation is required for starting programmes that target the large labour pool India possesses in sectors like agriculture, where the labour is underpaid and jobless for significant parts of the year.”

The programmes, with the collaboration of both the government and private sector, could aim to create an ecosystem where they set up skills training institutes nationwide with programmes tailored to industry needs. This partnership should ensure employment for certified graduates. Spreading awareness about the ease of learning these skills and employability using local leaders, influencers, and print, TV, and social media can generate interest and curiosity to join these institutes. India now has to focus on ‘Construct India’ along with  Make-in-India.’ 

The Union Budget 2024 is set to be transformative, focusing on green infrastructure, renewable energy, and sustainable development. By tackling key issues in the power, renewable energy, and construction sectors, the budget is expected to build a strong and sustainable economy, moving India closer to its goal of becoming a powerful economy on a global scale.