Vision for a technology-driven and knowledge-based economy

(Mainsgs2:Government policies and interventions for development in various sectors and issues arising out of their design and implementation.)

Context:

• The 2023-2024 Union Budget depicts the Union government’s long-term vision of a technology-driven, knowledge-based economy that banks on citizen engagement, youth empowerment, employment generation, and creating a robust macroeconomic environment. 
• At the heart of technology-driven, knowledge-based economy vision are four transformative opportunities: women empowerment, green growth, tourism and aiding indigenous knowledge by integrating them into the MSME value chain.

Green growth:

• The Budget set the stage for a timely and indispensable policy discourse on green growth, with a focus on several key areas, including green energy, green farming, green mobility, green buildings, energy efficiency, and lifestyle and behavioural changes.
• The focus on energy transitions is central to the green-growth narrative. The Centre has envisioned financial flows towards energy transitions to achieve net-zero targets by 2070.
• Although mobilising and scaling up finance for renewable energy infrastructure has multiple consequences for socio-economic and human wellbeing, there is growing consensus worldwide that the costs and benefits of such a massive transition aren’t equally distributed.
• Specifically, the transition to non-conventional resources has the potential to reproduce the power asymmetries of the fossil-fuel regime, in which marginalized communities, women, the elderly, and children have often been the worst-hit by infrastructure reconfigurations.

Transition to a low-carbon economy:

• To ensure that the structural inequities and power asymmetries of the fossil-fuel regime are not replicated through this emerging asset class, it is important to recognise that not everyone will benefit equally from a transition to a low-carbon economy.
•  In particular, those who rely on fossil-fuel production for their livelihoods or money flows through the fiscal route, or who were anticipating using fossil-fuel energy to meet their development needs, may carry a disproportionate share of the energy transition burden.
• This in turn calls for clear directives and frameworks to consciously embed ‘justice’ elements in financing India’s energy transition.

Financing the transitions:

• Given the rapidly growing renewable-energy market, with a target to achieve 500 GW generation by 2030, India has emerged as the fourth most attractive renewable energy market worldwide. 
• There are multiple provisions in the 2023-2024 Budget to prioritise investment towards energy transitions and achieve net-zero commitments.
• They include, among others: an outlay of Rs 35,000 crore as priority capital investments to the Ministry of Petroleum and Natural Gas; Rs 19,700 crore for the National Green Hydrogen Mission; a green credit programme to incentivise sustainable production throughout the supply chain.
• Further Rs 20,700 crore to create an interstate transmission system for grid integration and to extract 13 GW of renewable energy from Ladakh.

‘Justice’ in an energy transition:

• Although the Budget offered a promising outlook for India’s net-zero transformation, it doesn’t consciously include deliberations on ensuring that the shift is also socially just.
• To date, most of the policy decision-making in India has been guided by the perceived benefits of renewable energy, including reducing greenhouse-gas emissions, creating green jobs, and improving energy security by reducing India’s high energy-import bills. India is currently the world’s third largest energy-consuming economy.
• This demand is only going to rise in future, which means rapidly scaling up renewable-energy production is going to be key to achieving sustained economic development while also cutting emissions. 
• However, the emergence of this new asset class could also have negative impacts across the renewables value chain.

Related concerns:

• While scaling up renewables deployment, some of the concerns that we need to acknowledge and carefully resolve, through regulatory and governance interventions, include greater social and ecosystem vulnerabilities due to land-use change.
• Furher water-related conflicts due to intensive water use for the operation and maintenance of solar panels; injustices at sites where the rights of local communities have become less important than electricity production and access and other infrastructure provisioning.
• The transition could also disproportionately affect human and labour rights in the parts of the informal sector intersecting with mining and raw-material extraction and in the production and disposal of renewable-energy equipment.

Conclusion:

• Although the 2023 Budget set the stage to finance a renewable-energy transition, ensuring that energy can be used as a tool to deliver environmental and socioeconomic well-being across all brackets of society requires multilevel governance and diverse actor networks.