The Aakhya Weekly #141 | The Unspent Budget: A Missed Opportunity for India’s Environmental Crisis
In Focus: Addressing India’s Underutilized Funds & Environmental Budget Gaps
by Lovenish Kumar
It is said that "Nature will find its way to heal." But if it were to happen, we would not have to care about deforestation, global warming, or suffocating under dirty air. Can you imagine telling a city blanketed in smog to simply "heal itself"? The reality is that nature can only do so much, and we need human intervention to save it from further destruction. Unfortunately, despite acknowledging these environmental challenges, our government continues to underutilise the funds allocated for pollution control.
Out of the ₹858 crore set aside for the ‘Control of Pollution’ scheme in 2024-25, less than 1% has been utilised so far. The Ministry of Environment, Forest and Climate Change (MoEFCC) cited delays in approval as the reason, but this underutilisation raises serious concerns about the government's commitment to addressing pollution.
The parliamentary panel monitoring environment expenditure was left disappointed, labeling the development as, ‘shocking’. The 'Control of Pollution' scheme is one of the major funding sources for the National Clean Air Programme (NCAP), which seeks to curtail air pollution in 131 cities. Though bigger cities have support from other funds, this scheme was supposed to assist 82 smaller cities with bad air. Since 2019, a total of ₹3,072 crore has been allocated for these cities, yet a lack of timely action has stalled crucial pollution control efforts.
IMPRI’s Thematic Discussion: A Deeper Dive into the Budget
On February 12, 2025, during the period of the Union Budget discussions, the IMPRI Center for Environment, Climate Change, and Sustainable Development (CECCSD) organised a thematic session on ‘The Environment and the Union Budget 2025-26’ as part of its 6th Annual Series of Thematic Deliberations and Analysis. Chaired by Prof. Krishna Raj, a visiting professor at IMPRI and a faculty member at the Institute for Social and Economic Change (ISEC), Bengaluru, the session gathered experts to evaluate the budget's impact on environmental policies.
Among the speakers was Mr. Soumya Dutta, Co-Convener of the South Asian People’s Action on Climate Crisis (SAPACC), New Delhi. He highlighted concerns regarding the government's approach to environmental governance, suggesting that the MoEFCC's role has increasingly focused on granting clearances rather than strengthening regulatory frameworks.
Mr. Dutta highlighted a worrying trend in the budget. While the ministry’s overall allocation saw a 9% increase, the original allocation rose by only 2.5%, which, when adjusted for inflation (5.35%), represents a decline in spending. He pointed out that the environment ministry’s budget translates to just ₹23.4 per person per year, an alarming figure given that 90% of India’s population breathes polluted air and 60% experience climate-related disasters annually.
This could be compared with sectors like infrastructure and defence, which receive significantly higher allocations, starkly reflecting a prioritisation of economic expansion over environmental sustainability. While growth investments are crucial, the comparatively lower funding for environmental protection raises concerns about long-term ecological and public health impacts.
The Need for a Policy Shift
The lack of spending on pollution control and environmental protection is not just an administrative failure but a policy failure. 521 rivers in India were recently surveyed, of which, 320 were heavily polluted. Meanwhile, cyclonic activity on India’s western coast has doubled in the last 15 years, yet there is no dedicated budget for tackling coastal erosion, rising sea levels, or land loss.
With 15-16% of India’s population living in coastal areas, its vulnerability to climate change is increasing. Issues like ocean acidification, extreme weather events, and rising temperatures need immediate attention, yet they are largely ignored in budget planning. Mr. Dutta argued that India’s economic ambitions must be balanced with environmental responsibility. While the government has set a goal to become a high-income country, the current GDP growth rate of around 6% is insufficient to achieve this without a 10%+ annual growth rate. However, this growth cannot come at the cost of environmental degradation.
Recently, in the Rangareddy district, 400 acres of land were put up for auction, expected to bring in an impressive ₹10,000-15,000 crore for the Telangana government. The plan aims to develop world-class infrastructure, IT parks, and urban living spaces, reflecting the government's push for economic growth and modernisation. While such developments contribute to urban expansion and economic progress, they also raise concerns about environmental sustainability. Striking a balance between development and ecological preservation is crucial—ensuring that green spaces, biodiversity, and climate resilience are integrated into urban planning. A more streamlined approach to approving environmental projects, similar to infrastructure initiatives, could help address pressing climate challenges while fostering sustainable growth
How can the Government Utilize Funds Effectively?
To ensure better utilisation of environmental funds, the government must take a proactive and strategic approach. One crucial step is to allocate funds directly to state pollution control boards with strict spending timelines, preventing delays in crucial projects. Centralised control often results in bottlenecks, and empowering states with direct financial support can enhance on-ground implementation.
Strengthening accountability is equally important. Regular audits and transparent reporting mechanisms should be enforced to track fund utilization. If allocated funds remain unused within a specified period, they should be reallocated to urgent environmental projects, ensuring that resources do not go to waste.
India must also prioritize climate adaptation by addressing rising temperatures and climate risks. A National Heat Action Plan is essential to protect vulnerable communities, and state-level climate action plans—many of which remain underfunded—should receive adequate financial support to implement necessary measures.
Another key area is the renewable energy transition. While India has made commendable progress in expanding its renewable energy capacity, much of it caters to additional demand rather than replacing fossil fuels. Strengthening and upgrading initiatives like the PM-KUSUM Scheme, the Green Energy Corridor, and the National Green Hydrogen Mission can accelerate the transition towards clean energy. A more targeted approach is needed to modernize these initiatives and integrate them with emerging technologies.
Lastly, strengthening comprehensive climate policies is important. India has taken steps to balance environmental protection with economic growth through initiatives like the National Action Plan on Climate Change (NAPCC) and the National Green Hydrogen Mission. However, challenges in implementation, funding constraints, and reliance on carbon-intensive industries hinder progress. Addressing these gaps and developing a Green Economy Roadmap can help bridge the divide between sustainability and economic expansion, ensuring long-term resilience against climate challenges.
The Impact of Better Budget Utilization
Ensuring better utilisation of environmental funds can have far-reaching effects. Reduced air pollution in smaller cities would lead to better public health outcomes, lowering respiratory diseases and associated healthcare costs. Strengthening state-level climate resilience can protect vulnerable coastal populations from rising sea levels and extreme weather events. Proper waste management and river-cleaning initiatives can rejuvenate India’s water bodies, benefitting human and aquatic life. However, on the policy front, India has made notable progress in disaster preparedness by leveraging advanced technologies such as Doppler Weather Radars, the Indian Tsunami Early Warning System, and satellite-based monitoring through INSAT-3D. These systems have significantly improved the country’s ability to predict and mitigate climate-related disasters, helping save lives and reduce economic losses. Additionally, investing in a well-planned green transition can generate employment in clean energy, sustainable agriculture, and environmental conservation, driving economic growth while ensuring long-term sustainability.
India stands at a crossroads where its economic aspirations must align with environmental sustainability. The underutilisation of funds in 2024-25 was a lost opportunity, but it must serve as a wake-up call. Policy shifts, proactive budgeting, and stronger accountability are needed to ensure that future funds are properly spent. The government must take decisive action right away before the climate crisis deepens further.
The conversation about environmental funding cannot wait for another budget cycle. The clock is ticking, and if we don’t act soon, nature may, indeed, find a way to heal—but at a cost that none of us are prepared to pay.
Top Stories of the Week
Waqf Reforms: Towards Better Governance and Transparency
In the early hours of April 3, after a gripping 12-hour-long debate, the Lok Sabha witnessed a historic moment as the Waqf (Amendment) Bill, 2024, was passed with 288 votes in favor and 232 against. Alongside, the House also approved the Mussalman Wakf (Repeal) Bill, 2024, marking a significant shift in India’s approach to waqf property management. The Waqf (Amendment) Bill, 2024, aims to modernize the Waqf Act, 1995, addressing long-standing challenges in the governance of waqf properties. With a focus on efficiency, transparency, and technology, the amendments seek to streamline administration, enhance registration processes, and redefine key provisions to remove ambiguities.
Meanwhile, the Mussalman Wakf (Repeal) Bill, 2024, officially phases out the colonial-era Mussalman Wakf Act, 1923, a law that had outlived its relevance. Its repeal ensures uniformity and accountability, consolidating waqf governance under a single, updated framework. With these legislative moves, India takes a decisive step toward stronger, more transparent waqf management, ensuring these properties serve their intended purpose in a modern legal landscape.
U.S. Reciprocal Tariffs on Indian Exports
The United States has announced a 26% reciprocal tariff on Indian exports, citing existing disparities where India imposes higher tariffs on U.S. goods. Key Indian export categories affected include pharmaceuticals, telecom equipment, gemstones, petroleum products, gold jewellery, and ready-made cotton garments. On the import side, critical commodities such as crude oil, coal, petroleum products, electric machinery, and aerospace components form a significant part of bilateral trade.
The tariff is expected to impact vital Indian export sectors, particularly electronics and gems & jewellery, which constitute a significant share of trade. As these exports constitute a significant portion of overall outbound trade, domestic manufacturers and exporters must reassess their strategies and adapt to the evolving trade landscape. Furthermore, medium, small, and micro enterprises (MSMEs) engaged in export-driven production may experience pricing pressures, potentially affecting employment and domestic value chains. However, the development has been characterised as a "mixed bag," acknowledging both challenges and opportunities.
A Few Good Reads
Biju Dominic warns, “Business as usual cannot prevail” for social media as user pushback grows.
Arindam Goswami argues that India cannot remain a market skimmer forever and must prioritise deep tech innovation over short-term, low-risk startups to achieve true technological leadership.
As new marriages in China reportedly plummeted by one-fifth last year, Yi Fuxian argues that government efforts to boost births will inevitably fall short.
Ajay Chhibber urges India to cut its bloated government expenditure and pursue "Maximum Governance, Minimal Government" for competitiveness.
Jennifer Marlon and Jagadish Thaker highlight how bridging knowledge gaps and leveraging localised data can align public opinion with effective climate action in India.