National Budget: Will It Address Climate Change Concern?

India joined the trillion-dollar GDP club just before this year's usual Finance Minister’s budget speech. The fifth consecutive budget presentation by the incumbent finance minister (FM) P Chidambaram is itself a rare achievement that was only rivalled by his present prime minister. When Dr Manmohan Singh was finance minister, the Congress party government didn’t worry about the Earth Summit or climate change but just opened the Indian market for the West (waste!) world to plunge into it. However, the departure is visible in this budget when Chidambaram pays lip service to tackle climate change. Can we consider this budget the beginning of India’s concerned management of its environment?

Not likely. Last year's budget’s lip service on climate change was disastrous. Until now, the expert committee constituted to prepare a strategy paper has not submitted its report on India’s climate policy. According to Chidambaram, this preparation is in progress. Even while adhering to the principle of ‘common but differentiated responsibility’, FM suggests India must promote clean technology products; review fuel emission and efficiency regulations; replace wood with solar as the fuel of everyday use; encourage the use of gas, set up a trading platform for carbon emissions; build sustainable green-field cities and so on. Have we heard these ideas for the first time? While the Indian people and, to a large extent, the international players are waiting for the expert committee’s report, FM went further by proposing establishing a permanent institutional mechanism for development and environmental coordination. However, details of this mechanism are not mentioned or may be decided later. 

This proposition and exploration of new ideas is only to divert the international pressure on India to tackle climate change. It is worth noting that the Indian budget has never been generous to environmental management, be it wildlife conservation, forest management, or river cleaning projects. Even the five-year plans are less significant in terms of ecological issues. While considering several imaginary security threats from within and beyond its boundary, the FM has increased the defence budget allocation. The government is not at all worried about the danger of environmental threats harping on India.

While FM merely mentions climate change, he also facilitates more greenhouse gas emissions from Indian people. The air conditioning (AC) market in India has been growing like a gold mine, with 10-20 per cent annual growth since 2001. The Rs 30 billion strong air-conditioner market has recorded an impressive demand growth rate of 19 per cent (compounded) between 1991 and 2001. Looking at this lucrative booming demand, FM has reduced the taxes on ACs to increase sales. This should not be considered in the light of the division of societal class structure of ‘haves of AC’ and ‘have-nots of AC’. For the last couple of years, the temperature variations in the summer seasons have been unbearable. So, to get rid of this scorching summer heat, people are forced to buy ACs. Eventually, the per capita electricity consumption will come from thermal energy in India, which will skyrocket. So, now, the survival emissions in India will become the luxury emissions of the West. Indian climate campaigners will lose the upper hand in the fight against the largest emitters in the world. 

In other words, on the one hand, FM speaks about climate change and, on the other, creates avenues for the mass sale of Air Conditioners, coal-fired energy production and so on. The budget proposes an additional 78,577 MW power generation capacities in 2007-2012. However, 57 exploration blocks of oil and natural gases and 53 blocks of coal reserves, accounting for 13,842 million tonnes, have been allotted for consumption. However, the FM has not proposed any incentives for the generation of solar power for the industry to adapt to cleaner technologies. Although India has 1,83,000 MW of power potential from non-conventional energy sources, the emphasis is still on thermal energy sources.

After spending so much money, a CBI inquiry, one Task Force and several high-level meetings presided over by the Prime Minister, the Tiger population in India are 1,411! So, the majestic feline is under severe threat. This budget allocates a one-time grant of Rs.50 crore to the National Tiger Conservation Authority to rescue the tiger population. Most of the funding will be used to raise, arm and deploy a special Tiger Protection Force. This is the only visible allocation for environmental concerns in 2008. Besides tiger conservation, FM proposes an ‘irrigation and water resources finance corporation’ to meet the demand for massive agricultural investment.

Remember R.K Shanmukham Chetty’s budget speech in 1947-1948. It says: If the fabric of the State is not built on durable foundations, it will be futile to try and fill it with the material and moral contents of a good life. As Minister of Finance, Manmohan Singh dedicated the 1991-92 budget to the late Rajiv Gandhi’s dream of ushering India into the twenty-first century - a strong, united, technologically sophisticated, but humane India. The present FM, who is the modern-day Kautilya of Indian Arthasastra, has successfully managed to survive his full term as well as prepared the United Progressive Alliance (UPA) to face the general election smoothly. 

Leading national newspaper commended this year’s budget as both transformational and historic concerning the treatment it offers on social, economic, gender, educational, culture, inclusive growth, class equality and developmental issues. Is it? The 2008 budget has attracted a few debates and more concerns. Within the latent sense of ‘Incredible India’, this year’s budget has drawn deliberate criticism for the sake of criticism. From a ‘myopic budget’ to a ‘populist’ election budget, from a ‘competent budget overall and its profoundly poor-friendly overtone’ to ‘better than its colonial cousin’ compared to the British Government’s budget, the financial and developmental pundits have categorized it without substance. Has the minister fared well on the climate change front? No. India’s fiscal 2008-09 budget announcement has no concrete proposals or incentives for combating climate change.