India, as one of the world’s fastest-growing economies, is faced with the challenge of transitioning to a more sustainable and green economy. The country’s large population, expanding industrial base, and rapid urbanisation contribute to rising environmental concerns, including pollution, deforestation, and climate change.

The Union Budget 2025 has the potential to catalyze India’s green transition by allocating significant resources to renewable energy, electric mobility, sustainable agriculture, and climate-resilient infrastructure. With the world increasingly focused on sustainable development, the decisions India makes in this budget could play a pivotal role in shaping its environmental future and establishing its leadership in global climate action.

Looking at what India needs to do where renewable energy is concerned, India’s goal is to achieve 500 GW of renewable capacity by 2030, and net-zero carbon emissions by 2070 and to achieve this a significant financial boost to scale up its renewable energy infrastructure is the need of the hour. The budget needs to prioritise funding for solar, wind, and green hydrogen projects as well as encourage private sector innovation in clean energy. Apart from making funding easily accessible, offering stronger tax incentives for renewable energy companies, along with subsidies or direct investments in solar parks and wind farms, could help accelerate growth in these sectors. However, this will not be enough. 

The Budget 2025 also needs to look at allocating substantial funds to establish green energy corridors to ensure that clean energy reaches every corner of the country and integrates seamlessly into the national grid. With the right investment and policy support, the renewable energy sector has the potential to become a major source of employment, driving both environmental progress and local economic growth.

Electric mobility is a key part of India’s green transition. The sector is expecting the budget to play vital role in accelerating this transition by increasing incentives for EV manufacturing, expanding charging infrastructure, and encouraging consumers to adopt EVs. If the Government announces policies that will help borrowing easier for EV buyers, it will go a long way in encouraging higher offtake of EVs. However, equal amount of attention needs to be given to setting up a robust battery charging infrastructure and the sector is hopeful of the budget including incentives for supporting the development of charging infrastructure and battery technology. 

The government resources like land parcel, existing public transport infrastructure both central and state governments needs to be totally made available for building this infrastructure. However lowering GST on EVs and their components, such as batteries and charging stations, would make these vehicles more affordable for consumers and would continue to remain general expectations.

The transport sector is among the largest contributors to the country’s carbon emissions, making the shift to electric vehicles (EVs) crucial for reducing pollution and cutting dependence on fossil fuels. So, while the Government is looking to promote higher adoption of EV passenger vehicle, it cannot ignore the need to prioritize the adoption of electric buses and all mode of public transport in urban and inter-city transport networks.

India still remains an agrarian economy and integrating sustainability into this sector is has become a critical necessity. Schemes like the Chief Minister’s Sustainable Agriculture Irrigation Scheme exemplify efforts to promote resource-efficient farming practices. The sector is hopeful that the Government, in the upcoming budget, addresses the environmental impact of agriculture while supporting more sustainable farming practices. By investing in agri-tech solutions like precision farming, soil health monitoring, and water-efficient irrigation, it can help farmers boost their yields while using fewer resources. The budget could also promote organic farming, agroforestry, and climate-smart agriculture, all of which would contribute to a healthier environment. These efforts wouldn’t just help fight climate change-they’d also improve soil quality, conserve water, and support biodiversity, making farming more resilient and sustainable in the long run.

India’s green transition is having the effect of generating immense chances for entrepreneurship. The sustainability-driven entrepreneurship is a game changer for rural India. Expanding initiatives like Start-Up Village Entrepreneurship Program (SVEP) under DAY-NRLM with a focus on sustainable business models will drive green growth. By encouraging initiatives such as waste-to-energy projects and small-scale solar farms, the government can foster local innovation while creating employment opportunities. Tax incentives for startups focused on circular economy models and grants for renewable energy-based enterprises could further accelerate this momentum.

The policies announced in the budget could also help bridging the funding gap and provision of incentives encouraging domestic green manufactures will stimulate the local industry and align with “Make in India”. Furthermore, a comprehensive energy transition policy is required to lay out a clear path for decarbonizing difficult-to-abate industries and integrating multiple energy sources to achieve a balanced energy portfolio. By strategically investing in renewable energy, electric vehicle infrastructure, sustainable agriculture, and green entrepreneurship, the government can foster a resilient, inclusive economy. These measures will not only contribute to environmental sustainability but also create new economic opportunities and jobs. As India moves closer to its climate goals, the time for action is now, and the forthcoming budget could be a pivotal moment in the nation’s journey toward a greener and more sustainable future.

In a nutshell, India’s green transition is not just an environmental necessity; it is also an economic opportunity. As the world shifts toward a more sustainable future, India stands to benefit from the growing global demand for clean technologies, renewable energy, and green products. However, realizing this potential requires bold investments and policy reforms to ensure that green initiatives are not only environmentally effective but also economically viable and inclusive. The budget will be a crucial tool in balancing short-term economic growth with long-term environmental sustainability.