Budgeting for the environment

Just three years ago (2008-09), the Budget speech of the Finance Minister found barely a mention of environment, with the exception of possibly clean drinking water and an introduction to climate change. By contrast, today, environmental considerations are sprinkled throughout the text of the Budget speech which is encouraging in that the Government is becoming sensitive to the need to appear environmentally conscious and, maybe, to the fact that environmental concerns could potentially derail the economic growth prospects. Having said that, the speech also makes transparent the long way India has to go to fully understand the complex environmental implications of its policies and regulations and achieve the policy coherence needed to ensure long term sustainability.

A good illustration of such incoherence is provided in the context of agriculture and the environment. Thus, there is a recognition in the Budget of the need to expand the green revolution to the eastern region while at the same time lamenting the deterioration in soil health due to indiscriminate use of chemical fertilizers and distorted pricing structures. Similarly, the virtues of palm oil (which is a water guzzling crop) have been highlighted to meet the edible oil shortage while emphasizing the need for water conservation in the context of using a by-product of palm oil in laundry soap!

The budget does well in recognizing the contribution of solar lanterns to rural development and providing customs duty relief on its components but stops short of reviewing the efficacy of the Rajeev Gandhi Grameen Vidyutikaran Yojana (RGGVY) in providing reliable electricity in rural areas nor does it recognize the role that solar energy can play in supporting the cold chain infrastructure for agricultural produce. The telecom towers sprinkled all over rural India still largely use diesel gensets for meeting their energy requirements at a very high cost - India would do well to learn from this experience and look for clean alternatives for the cold chain business.

Also, the support to the small and medium enterprise sector must extend to the provision of clean technology development support if environmental concerns are not to hamper development needs.

Environmentally positive aspects of the Budget revolve around the long-pending recognition of the futility of kerosene subsidies and the explicit sections on environment and climate change in both parts of the FM's speech. However, if one compares the couple of hundred crores of rupees each allocated to forests, environmental management and the cleaning of rivers with the tens of thousands of crores allocated to economic growth supporting and social inclusion programmes, it is obvious that the third pillar of sustainable development continues to get short shrift in the country. Finally, as the self-confessed statement of the FM himself ("..... the implementation gaps, leakages from public programmes and the quality of our outcomes are a serious challenge.") begs the answer: is the annual budget balancing exercise the best place to look for strategic policy statements and outcomes from the government?

Tags: rural development, environmental budget, Budget 2010-11