Sustainability Karma

India's first and only show on sustainability on All India Radio

Union Budget 2025-26 Expectations

To unlock climate finance at scale, a robust climate taxonomy is essential: Namita Vikas of auctusESG

Union Budget 2025: Prioritise clean mobility, including electric buses, metro expansions, and enhanced public transport networks for Tier 2 and Tier 3 cities.

So far India has demonstrated proactiveness on green transformation, with policies that promise to drive the sectors. It is expected that FM Nirmala Sitharaman proposes measures and outlays that enable India inch closer to achieving its 2030 climate goals under the Paris Agreement. Growth sectors – renewable energy, green hydrogen, and green urban infrastructure, continue to be a big opportunity and following interventions may fuel their trajectory:

Renewable energy & green hydrogen 

With the groundwork laid by the National Green Hydrogen Mission and expanded incentives for solar panel manufacturing in the previous budget, expectations include:

  • Increased allocations for offshore wind projects and advanced energy storage solutions
  • Financial support entailing credit enhancements, hedging instruments, guarantees for enhancing international and national capital flows to scale domestic green hydrogen production and export infrastructure, fostering global leadership in this emerging sector

Green urban infrastructure

Sustainable urbanisation is critical to balancing growth with environmental stewardship. The 2025 budget could:

  • Expand funding for the Urban Infrastructure Development Fund (UIDF), focusing on smart cities, green buildings, and waste-to-energy systems
  • Prioritise clean mobility, including electric buses, metro expansions, and enhanced public transport networks for Tier 2 and Tier 3 cities

To unlock climate finance at scale, a robust climate taxonomy is essential. With the critical announcement made last year, a concrete announcement is expected this year clearly outlining what constitutes as “green” and “sustainable” activities. As we look to the future, Budget 2025 is crucial in paving the way for India’s transition to a net-zero economy by mobilising climate finance, fostering innovation, and enabling green growth.