Budget 2025: The Environment Lags Behind as Energy Security, Development Schemes Take Centre Stage

New Delhi: On February 1, Union Finance Minister Nirmala Sitharaman proposed several development measures across ten areas focusing on the poor, the youth, farmers and women as she presented the Union Budget 2025-26 in the Parliament. But despite a focus on agriculture including promoting high-yielding seed varieties, the environment has taken a back seat in this year’s Budget.

The only common thread from the 2024-25 budget which Sitharaman presented in July last year, is promoting energy security – this year’s Budget pushes forward the energy transition to solar, wind and nuclear energy in a big way, through measures including increased budgetary allocations for central solar schemes and a “Nuclear Energy Mission”.

However, the ecological footprints of these supposedly green energy sectors are still a concern, experts say. Meanwhile, budgets have increased for several central programmes including the Commission for Air Quality Management, as well as the ministries of new and renewable energy and environment when compared to last year.

Agriculture as one of four “powerful engines”

In her budget speech in the Lok Sabha on February 1, Sitharaman announced a new “Prime Minister Dhan-Dhaanya Krishi Yojana”, which will be undertaken in partnership with states across 100 districts.

Existing schemes would be “converged”, and the programme will cover 100 districts with low productivity, moderate crop intensity and below-average credit parameters, the Finance Minister announced, to “enhance agricultural productivity, adopt crop diversification and sustainable agriculture practices, augment post-harvest storage at the panchayat and block level, improve irrigation facilities, and facilitate availability of long-term and short-term credit”.

“This programme is likely to help 1.7 crore farmers,” she announced.

Another new programme that Sitharaman said would be launched was a National Mission on High Yielding Seeds which would ‘strengthen’ the research ecosystem, and aid in the “targeted development and propagation of seeds with high yield, pest resistance and climate resilience. More than 100 seed varieties released since July 2024 would also be made commercially available, she said.

Sitharaman also commented on the role of fostering more exports in the fisheries sector. The government, she said, will bring in “an enabling framework for sustainable harnessing of fisheries from the Indian Exclusive Economic Zone and High Seas, with a special focus on the Andaman and Nicobar and Lakshadweep Islands.”

However, Sithararaman did not mention what these sustainable measures could be. Overfishing along with climate change have already caused huge fish population declines, such as that of yellow-fin tuna in the Indian Ocean (a study in 2023 noted that the species, which is commercially harvested, has declined by nearly 70% since 1950); Mongabay-India has reported on how Indian fishers have to now head further away into the deep sea to catch fish.

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The Mahatma Gandhi National Rural Employment Guarantee Scheme did not find mention in Sitharaman’s budget speech as The Wire reported, and its budget allocation this year has not increased either. And though Sitharaman called agriculture one of the “four powerful engines” for the proposed “journey of development”, many important schemes have witnessed decreased budgetary allocations in this year’s budget, and farmer organisations are not happy.

“We are dismayed to note the consistent decline in the budget allocations by the Central government on Agriculture and Allied activities,” the Samyukt Kisan Morcha said in a press statement on February 1. 

“As per the revised estimate 2024-25, the expenditure made in the Agriculture and Allied Sector is Rs. 3,76,720 .41 crore and in the 2025-26 Budget the estimated amount is Rs. 3, 71,687.35 crore that is less by Rs. 5042.06 crore.  Considering the inflation also this is a drastic cut in allocation for a sector that is the ‘first engine of the economy’ in the words of the Finance Minister,” the statement read.

The ‘Flagship Programme of Pradhan Mantri Fasal Bima Yojana’ for crop insurance, “the drastic cut” is of Rs. 3,621.73 crore from Rs.16864.00 crore in 2024-25 to Rs. 12,242.27 crore in 2025-26, it said. 

The SKM has called on farmers across India to protest against the “anti-farmer, anti-worker, anti-poor and pro-corporate” budget by burning its copies and “demanding withdrawal of all the anti-people proposals in it”.

“The government has kept agriculture as one of the top priorities, but this has been the case for the last eight years. However, the government has not talked about farmers’ income or agriculture income, which should be the prime concern. Without considering this, just keeping it as a top priority wouldn’t make any difference because if farmers do not have a stable income, they will not be able to deal with the challenges posed by climate change,” Devinder Sharma, agriculture trade policy expert said in a press statement.

“There will be no capacity to deal with extreme weather events. I believe that we need to work on this and the same should have been included in the budget which is missing.”

Boosting domestic manufacturing for clean energy

In an effort to boost domestic manufacturing in clean energy, Sitharaman announced in her budget speech that the union government would set up a “National Manufacturing Mission” to cover small, medium and large industries taking forward the government’s Make In India scheme.

The Manufacturing Mission, Sitharaman said, would provide “policy support, execution roadmaps, governance and [a] monitoring framework for central ministries and states”. This Mission, she added, would also support clean technology manufacturing in the country. 

“Given our commitment to climate-friendly development, the Mission will also support Clean Tech manufacturing. This will aim to improve domestic value addition and build our ecosystem for solar PV cells, EV batteries, motors and controllers, electrolysers, wind turbines, very high voltage transmission equipment and grid scale batteries,” she said, in her speech on February 1. 

The budgetary allocation for several solar schemes have also increased. The allocation for the Prime Minister’s Surya Ghar Yojana is up by a whopping 80%, at Rs. 20,000 crore in this Budget. The programme, launched in 2022 under the Ministry of New and Renewable Energy, aims to encourage solar rooftop capacity especially across residences and provides for a subsidy of 60% of the solar unit cost for systems up to 2kW capacity and 40% of additional system cost for systems of between 2 to 3kW capacity.

“Similarly, the KUSUM programme has seen its budget increase from Rs. 1,496 crore to Rs. 2,000 crore this year. The revised budget for this year was Rs. 2,525 crore, again showing good on-ground implementation,” commented Debadityo Sinha, lead, climate and ecosystems initiative at the Delhi-based Vidhi Centre for Legal Policy.

The budget “signals a strong commitment to India’s clean mobility and energy transition”, Randheer Singh, a former director of e-mobility in the union government think tank NITI Aayog and currently CEO of ForeSee Advisors which advises clients on electric vehicles and battery storage value chains, said in a press statement.

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“The focus on expanding the EV ecosystem, strengthening domestic battery manufacturing, and supporting startups and alternative investment funds (AIFs) is a welcome step toward sustainability and self-reliance,” he said. “The emphasis on lithium-ion and alternative battery chemistries, along with measures to enhance green financing, will be instrumental in accelerating EV adoption and energy storage solutions.” 

However, some areas “warrant further attention”, he added. 

“A more comprehensive roadmap for commercial megawatt level charging infrastructure, incentives for fleet electrification, and clarity on execution frameworks will be critical to ensuring effective implementation. Additionally, broader environmental sustainability measures, such as targeted pollution reduction strategies in urban areas and deeper interventions for river rejuvenation, remain areas where more focused initiatives could have further strengthened the vision for a cleaner and greener India.”

Push for nuclear energy, again

In her budget speech on February 1, Sitharaman said that India would develop at least 100 gigawatts of nuclear energy by 2047 – this is “essential for our energy transition efforts”, she said. 

Sitharaman also announced that the union government would set up a “Nuclear Energy Mission” for research and development of Small Modular Reactors (SMR) at a cost of Rs. 20,000 crore; of these, at least five indigenously-developed SMRs will be operationalized by 2033, she said.

There would be an “active partnership with the private sector” to attain this goal of 100 GW of nuclear energy, she said, adding that the government would amend the Atomic Energy Act and the Civil Liability for Nuclear Damage Act.

Nuclear energy did find a fillip in last year’s budget too, with Sitharaman announcing in her budget speech on July 23 that nuclear energy was “expected to form a very significant part of the energy mix for Viksit Bharat”.

The budget had then allocated Rs. 2,228 crore for nuclear power projects across the country – a rise from the budget estimates of Rs. 442 crore in 2023-24 that were further revised to Rs. 1,791 crore the same year. However, while India needs to diversify its energy sources, the viability of such projects is still questionable, Vibhuti Garg, Director, South Asia at Institute for Energy Economics and Financial Analysis (IEEFA) had told The Wire then – because such projects are expensive, and the availability of fuel is a big issue as is safety. Obviously, these concerns still remain. 

Similarly, other sources that are pushed as green energy (such as wind and hydropower) are not necessarily so because of the ecological and social impacts it can have on local ecosystems and communities.

For instance, a study in 2018 found that wind turbines in Chalkewadi in Maharashtra were a decrease in birds of prey, causing an increase in the number of a species of fan-throated lizards or a “trophic cascade” – a phenomenon where changes occur across the food web, and cause larger impacts on the local ecosystem. Solar farms bring in challenges unless they’re specifically addressed.

A solar park in Pavagada taluk in Karnataka’s Tumakuru district has not only witnessed a decline in pollinators, birds and mammals, but also meant that locals have lost access to grazing grounds which they used to depend on before, as reported by Mongabay-India.

In fact, it is good to see that the budget allocation for wind and hydropower is slowing down, commented Sinha.

“These sources have long been marketed as green energy sources but have a huge ecological footprint. This year, the allocation is Rs. 500 crore, down from Rs. 851 crore and Rs. 929 crore in the previous two budget years,” he told The Wire on February 1, and also mentioned this in his social media post.

Increased budget allocations

The Ministry of New and Renewable Energy – which includes setting up solar and other green energy sources of power – has received a far higher budget allocation this year, at Rs. 26,549.38 crore. Last year’s budget witnessed an allocation of Rs. 19,100 crore, of which the Ministry utilized Rs. 17,298.44 crore, as per revised estimates as mentioned in the Budget this year.

The budget allocation to the Ministry of Environment, Forest and Climate Change has also increased this year – from Rs. 3330.37 crore last year (of which the Ministry spent Rs. 3125.96 crore, as per Revised Estimates for 2024-25) to Rs. 3412.82 crore this year.

Budgets allocations for several central programmes under the Ministry have also increased this year. The budget for the Commission for Air Quality Management (CAQM) has increased from Rs. 16 crore last year to Rs. 38.98 crore this year. The CAQM was set up to manage air quality in the National Capital Region and adjoining areas; sub-committees within the Commission take decisions on invoking different stages of the Graded Response Action Plan depending on the levels of pollution in the national capital.

The CAQM’s increased funding allocation could be relevant given the recent dips in air quality in the NCR. Similarly, funding for the Central Pollution Control Board is also up, from Rs. 112 crore last year to Rs. 126 crore this year.

The National Zoological Park is getting a lot more money this year, with a budget of Rs. 44.32 crore, commented Sinha.

“Last year, they received Rs. 23 crore, which was revised to Rs. 30.54 crore. The government is really into zoos and safaris in forests now, as we have seen the recent amendments to the forest laws to exempt ‘zoo, safari, ecotourism’- so this was expected,” he said.