Green Budgeting in India: Balancing Environmental Sustainability and Economic Development

Green budgeting connects government spending with environmental and climate objectives. Rather than treating green budgeting in India as a single undifferentiated practice, this paper narrows the inquiry to one specific question: to what extent do India's existing green-budgeting practices translate budgetary allocations into measurable environmental outcomes? Using a conceptual framework that distinguishes environmental policy, climate finance, and green budgeting, the paper examines India's principal budget-linked instruments, including allocations to renewable energy, PM-KUSUM, Saubhagya, PMUY, the National Green Hydrogen Mission, and PM E-DRIVE. It systematically compares budgeted allocations with actual or revised expenditure across recent financial years. The analysis finds that India has broadened the volume and diversity of environmentally linked spending, but that allocation figures alone are a poor guide to effectiveness. Expenditure on the Ministry of New and Renewable Energy has diverged from approved budgets in every year examined, while PM-KUSUM expenditure has, in contrast, exceeded its budget substantially. Even where funds are largely spent, environmental outcomes do not always match the scale of investment: near-universal Saubhagya electrification and a stated 10.6-crore-connection PMUY target coexist with independent survey evidence that a significant share of rural households still rely on solid cooking fuel, and the National Green Hydrogen Mission has commissioned a small fraction of its allocated production pipeline. The paper concludes that India's green budgeting is best described as an emerging and still fragmented practice, whose effectiveness depends less on the size of allocations than on closing the gap between spending, monitoring, and outcome evaluation.