Economic Survey 2024-25 - Chapter 10: Climate and Environment
India is focused on balancing rapid economic growth with environmental sustainability, preparing for climate change impacts and renewable energy challenges.
India, the world’s largest democracy and one of the fastest growing economies, is at a crucial crossroads in its development journey. India has set its sights on becoming a developed nation by 2047 with a clear focus on sustainable growth. However, this ambition isn’t just about building a strong economy, it’s about balancing growth with environmental responsibility. Climate change poses threat to India’s future but the country’s response offers how emerging economies can transition toward sustainable development while overcoming challenges.
With half of India’s population under the age of 25 and rapidly expanding urbanization, India has a unique opportunity to create a sustainable future. India’s climate strategy is rooted in a commitment to low-carbon growth, ensuring that development doesn’t come at the expense of the environment. But with its increasing energy needs, vulnerability to climate change and limited access to renewable energy technologies, India’s task is massive.
In this article, we’ll explore India’s multifaceted approach to climate change, its adaptation strategies, renewable energy goals, financial innovations and the role of its young population in driving change.
India’s Climate Vulnerability and Adaptation Strategy
India is one of the most vulnerable countries to climate change, with rising temperatures, extreme weather events and water scarcity already affecting millions of people. In fact, India ranks seventh in terms of global vulnerability to climate impacts. Given its vast size and geographic diversity, country faces a broad range of challenges from devastating floods in the north to droughts in the south, rising sea levels along its coastline and the depletion of groundwater resources in urban areas.
India’s approach to tackling climate change is not only about mitigating the effects of emissions but also about adapting to the changing climate. This adaptation is a priority for the country. In FY22, India allocated about 5.6% of its GDP to adaptation efforts up from 3.7% in FY16, demonstrating a growing commitment to climate resilience.
Adaptation efforts focus on several key sectors: agriculture, urban areas, water resources and coastal regions. Here’s how India is addressing each of these:
Agriculture - Ensuring Food Security and Water Conservation
Agriculture is the backbone of India’s rural economy, supporting more than 50% of the population. However, it is also one of the sectors most vulnerable to climate change. Extreme heat, unpredictable monsoons and water shortages are already threatening crop yields.
India has responded by developing climate-resilient crops, promoting efficient irrigation systems and focusing on water conservation. For example, National Mission on Sustainable Agriculture has helped farmers adopt water-efficient farming techniques, such as drip irrigation and rainwater harvesting. Research is focused on creating heat-resistant seeds that can withstand rising temperatures.
Government is also investing in soil health, promoting organic farming and supporting farmers with financial incentives to adopt sustainable practices. By 2025, India aims to introduce climate-resilient varieties of 25 crops.
Urban Areas: Building Resilient Cities
India is rapidly urbanizing, with nearly 40% of the population now living in cities. As cities expand, they are becoming increasingly vulnerable to climate change impacts such as urban flooding, heat stress and diminishing groundwater levels. To address these challenges, India is implementing the National Mission on Sustainable Habitat (NMSH), which focuses on creating low-carbon, climate-resilient cities.
One of the flagship projects under this mission is Atal Mission for Rejuvenation and Urban Transformation (AMRUT), which aims to reduce urban flooding by constructing stormwater drainage systems and developing green spaces. As of December 2024, 785 stormwater drainage projects have been completed and 2,438 parks have been developed, increasing green cover across cities.
To enhance water security, AMRUT 2.0 project focuses on rejuvenating water bodies, constructing rainwater harvesting structures and increasing groundwater recharge. By 2025, 3,078 water body rejuvenation projects are planned to improve water availability in cities.
Coastal Regions:
India has a 7,600 km coastline. Rising sea levels, coastal flooding and cyclones threaten millions of people living near the coast. To protect these regions, India is focusing on mangrove conservation, building sea walls and coastal ecosystem restoration.
One of the key initiatives is Mangrove Initiative for Shoreline Habitats & Tangible Incomes (MISHTI), launched in Union Budget of 2023-24. This program aims to restore 540 square kilometers of mangrove forests across 9 coastal states which will not only provide natural protection from storms but also sequester 4.5 million tons of CO2 and create 22.8 million man-days of employment.
Water Management:
Water scarcity is a growing crisis in India, with several regions facing severe water stress. Government has rolled out initiatives such as Jal Shakti Abhiyan, which focuses on rainwater harvesting and water conservation. Under this initiative, 24,800 rainwater harvesting structures have been constructed in Gujarat alone and more than 3,000 water body rejuvenation projects have been planned nationwide. Bhu-Neer portal, launched in September 2024, is designed to manage and regulate India’s groundwater resources. This real-time data helps track water usage and ensures that groundwater extraction is sustainable.
Energy Transition From Fossil Fuels to Renewables
India’s energy needs are growing rapidly, with a population of over 1.4 billion and expanding industrial and agricultural sectors. As the country seeks to transition from fossil fuels to renewable energy, several challenges arise, including the high cost of clean energy technologies, intermittency of solar and wind power and need for grid modernization.
However, India has made strides in expanding its renewable energy capacity. As of November 2024, India’s total installed renewable energy capacity reached 213,701 megawatts, accounting for 46.8% of its total energy mix. India has also set an ambitious target to increase this share to 50% by 2030.
India’s renewable energy push is led by solar and wind power, with a combined share of 31.1% of total electricity generation in 2023. India also aims to add 40-45 gigawatts of rooftop solar capacity by 2027 with over 7 lakh rooftops already equipped with solar systems.
Also, several innovative projects are underway to support India’s energy transition. For instance, Green Energy Corridor (GEC) project aims to enhance capacity of India’s electricity transmission infrastructure, with 9,136 circuit kilometers of transmission lines already installed to support renewable energy integration.
India is also exploring offshore wind energy with a budget allocation of ₹7,453 crore to develop projects along the coasts of Gujarat and Tamil Nadu. National Bioenergy Programme is promoting use of biomass and biogas to reduce dependence on coal and gas for power generation.
Finances and Green Bonds
India's key challenge in its climate transition is access to adequate funding. While domestic resources have played a crucial role in financing climate adaptation and mitigation projects, international financing has often been insufficient.
India has turned to innovative financial instruments to bridge the gap. Green Bond market is one such instrument, allowing country to raise funds specifically for environmental projects. In FY24, India issued ₹20,000 crore ($2.5 billion) worth of Sovereign Green Bonds (SGrBs), which are earmarked for financing renewable energy infrastructure and green urban projects.
India is also exploring Transition Bonds and Blue Bonds, aimed at supporting industries in their transition to sustainable practices and protecting marine ecosystems, respectively. These financial products are designed to attract global investors and ensure that climate projects have the funding they need to succeed.
Role of Youth in Driving Climate Action
India’s youth are leading the charge in environmental activism, advocating for stronger climate policies and adopting sustainable practices in their daily lives. Young innovators are also contributing to India’s green tech sector, developing solutions that reduce carbon footprints, improve energy efficiency and promote sustainability. India’s start-up ecosystem is booming with many youth-led ventures focused on clean energy, sustainable agriculture and green infrastructure.
LiFE initiative (Lifestyle for Environment), launched in COP26 in 2021, has been embraced by India’s youth. Mission encourages individuals to adopt sustainable lifestyles, such as reducing food waste, choosing plant-based diets and using renewable energy. If adopted at scale, LiFE movement could lead to massive reductions in global carbon emissions.
South-South Cooperation and International Leadership
India’s leadership extends beyond its borders. India has been at the forefront of South-South cooperation, fostering partnerships with other developing nations to share knowledge, technologies and financing solutions for climate action. International Solar Alliance (ISA) is one such initiative with India leading efforts to promote solar energy in 121 solar-rich countries.
At COP27 and COP29, India has consistently pushed for more ambitious climate action from developed nations, calling for greater financial support and technology transfer to developing countries.
India’s path to sustainable development is both ambitious and challenging. While the journey ahead is long, India’s commitment to climate adaptation, energy transition, and financial innovation demonstrates that it is possible for emerging economies to grow sustainably. With the right mix of government policies, private sector involvement and global cooperation, India can secure a greener, more resilient future for itself and the world.
Source: Economic Survey: Chapter 10 - CLIMATE AND ENVIRONMENT: ADAPTATION MATTERS