NDA 3.0: What Does It Mean for ESG in India

The next five years of India’s future will be defined by the NDA-led coalition government with Prime Minister Narendra Modi at the helm. With all that has unravelled over the last few months, a crucial question remains: where does this leave India in its mission to achieve net-zero emissions by 2070?

India’s commitment to combating climate change has become more critical than ever. In 2023, India experienced one of the hottest years on record, with average temperatures soaring 1.1°C above the long-term average. The country also witnessed unprecedented extreme weather events, including devastating floods in the northeast, severe droughts in the south, and a prolonged heatwave that affected millions across the northern plains. The economic impact of these climate-related disasters has been staggering, with losses estimated at over $90 billion in 2023 alone.

As the world's third-largest emitter of greenhouse gases, India's role in global climate action is pivotal. The country has already made significant strides, including a 24% increase in renewable energy capacity since 2020 and a substantial reduction in coal dependency. However, challenges remain, particularly in sectors such as transportation and agriculture, which account for a significant portion of India's emissions.

Prime Minister Modi’s recent electoral victory offers an opportunity to accelerate these efforts. His government’s ambitious plans for green industrialization, sustainable urban development, and large-scale reforestation could position India as a global leader in environmental, social, and governance (ESG) initiatives. The success of these initiatives will not only depend on policy execution but also on the active participation of private enterprises, international cooperation, and community engagement.

With India's population projected to reach 1.5 billion by 2030, the urgency for sustainable development has never been greater. The upcoming years will be crucial in determining whether India can balance its developmental goals with its environmental responsibilities, setting a precedent for other developing nations to follow.

In his victory speech, Prime Minister Modi, shed some light on what we can expect from the BJP-led alliance in their third term. He started by thanking the people of India and commended their determination to come out and vote despite the sweltering heat. This record-breaking heat can be attributed to a massive heatwave that has ravaged India over the last few weeks. Between March and May of 2024, nearly 25,000 heatstroke cases and 56 heat-related deaths have been reported in India. With temperatures in New Delhi going as high as 52.3°C, a discussion around climate change has become more imperative than ever.

Mr. Modi, in his speech, went on to describe the vision of an NDA 3.0-led India. He covered topics such as the eradication of poverty, India’s journey to space leadership, growth, development, and more. He proclaimed that India’s next era will be a ‘Green era’ where we will lead ‘Green Industrialization’ “from green mobility to green energy.” He assured the people that India is poised to tackle major global challenges ranging from food security to climate change. This mirrors the stance he took at COP28 Dubai and the World Government Summit. At those conventions, he elucidated how the global south unfairly suffers the majority of the adverse effects of climate change. He highlighted the significant role of climate finance in reducing this disparity and reaffirmed India’s commitment to ensuring the success and longevity of the ‘Loss and Damage Fund’ (UNFCCC) and ‘Green Climate Fund.’ He also celebrated India’s progress with bio-fuels and green hydrogen and summarized that mission LIFE focused on making people pro-planet while exploring the potential of green-credit.

These promises will go a long way in strengthening the ESG sentiment in India. On June 3, it was announced that The Department of Science and Technology (DST), Ministry of Science and Technology Government of India, approved funding of Rs 50 crore each for four upcoming green hydrogen valley projects in India. Despite some setbacks such as the fall in rooftop solar installations due to oversubscription under the PM SURYA GHAR: MUFT BIJLI YOJANA programme, 2024 could prove to be a revolutionary year for sustainability in India. To see how this would translate across the five-year term of the newly elected government, one need not look further than the 2024 BJP manifesto.

The manifesto, titled ‘Modi ki Guarantee, 2024’ (Modi’s Guarantees, 2024), lays out the growth plan the BJP has put together for its five-year tenure. The document is peppered with promises of sustainability. This includes the promise to build and develop sustainable cities with more green spaces, revived water bodies, and more natural spaces to make cities adaptable and people-friendly. It also focuses on:

• Crop diversification in agriculture
• Improvements in pearl farming
• Setting up a ‘Handicraft Design Bank’ to promote Indian craftsmanship and upskill artisans
• Encouraging tech-driven startups to initiate sustainable forest-based enterprises as a value addition for forest produce
• Securing India’s participation in the global mineral supply chain to foster sustainable mining practices
• Becoming the largest lab-grown diamond producer to reduce strain on lands (we are currently the 2nd largest producer)
• Developing battery energy storage system infrastructure through incentivized private sector investments to foster renewable energy integration, grid stability, and resilience
• Promoting sustainable eco-tourism across selected under-explored Indian regions including islands

Under the final section of the manifesto, the guarantee for a sustainable India is laid out. Let’s review some major highlights: To revitalize our rivers, the BJP government intends to roll out a phase-wise improvement plan, similar to Namami Gange, to improve the health and cleanliness of all major rivers. India has been cleaning up its polluted rivers for many decades now. Out of the 457 projects taken up under the Namami Gange Programme in FY 2014-15, only 280 have been completed. This has cost taxpayers a whopping Rs 38,438.05 crore. Yet 43% of the 603 Indian rivers remain highly polluted. Clearly, targeting major rivers is not sufficient.

The next issue addressed is ‘Air Quality.’ The BJP initiated the National Clean Air Program (NCAP) framework, aimed at reducing air pollution across 131 cities. However, they aim to achieve National Air Quality Standards in 60 cities only by 2029. This means that their target is a mere 1.5% of Indian cities by 2029. To provide some context, in 2024, 42 of the world’s 50 cities with the worst air pollution are Indian despite the NCAP being in effect since 2019. We need a more comprehensive plan because the basic human right to breathable air should not require decades.

The BJP intends to promote reforestation and agroforestry to create a carbon sink by enhancing tree cover. The cornerstone of this project is the Green Aravalli Project, which aims to create a 1400 km long green belt buffer around the Aravalli Mountain Range. While this remains a great initiative, it is shadowed by the immense deforestation taking place across the country. The Aarey Forest, also known as the lungs of Mumbai, is a prime example. The forest was cut down to build a vehicle shed for the Mumbai Metro-3 project. Despite the Supreme Court reprimanding the MMRCL, which is under the oversight of the Eknath Shinde (BJP) led state government, they sought to overreach the judicial ruling. The city of Mumbai currently has 11,125 active construction sites with little to no forest cover. Not only has this resulted in worsening air quality, it also contributed to the recent dust storm in Mumbai that left 14 dead and 74 injured. While reforestation is very important, conservation of existing forest cover cannot be ignored.

Reforestation and forest protection are huge factors in natural disaster prevention, a cause that the manifesto stresses upon. Many of the initiatives mentioned are commendable. Some key initiatives include protecting the Himalayan ecology, developing coastal climate resilience, and expanding green credit programs. This leaves an opening for private players to participate in the new sustainable India.

The manifesto also emphasizes sustainable living through Mission LIFE, institutionalizing recycling mandates, and implementing schemes like PM Surya Ghar Yojana and PM e-Bus for green energy. It targets energy independence by 2047, increasing ethanol blending, and expanding nuclear and renewable energy production.

All these initiatives serve a singular purpose: net zero emissions by 2070. However, it might be too late by then. It is important to take a minute and visualize what India will look like if climate change progresses at its current pace. It is estimated that by 2050, India will lose 22% of its income to climate change. In 2022 alone, India suffered an 8% loss in GDP due to the effects of climate change. The World Bank notes that under 4°C warming, the west coast and southern India will shift to new, high-temperature climatic regimes with significant impacts on agriculture. Droughts are expected to be more frequent in some areas, especially in north-western India, Jharkhand, Orissa, and Chhattisgarh. Crop yields are expected to fall significantly because of extreme heat by the 2040s. Even without climate change, 15% of our groundwater resources are over-exploited and unpredictable monsoons will only worsen this. Melting glaciers will affect the livelihoods of millions and coastal flooding will put the citizens of cities like Mumbai at serious risk.

The Green Industrialization movement explored in this manifesto is a step in the right direction. It opens lucrative doors for private players through climate finance, green credits, green energy, and other innovative projects. It has managed to highlight the pro-profit, pro-environment revolution that India desperately needs. However, execution in a timely manner will define its success. Let’s not forget, all other causes become obsolete in the face of climate change because there is no point in industrializing and developing a country that is uninhabitable.

To learn more or discuss climate action and sustainability solutions, connect with Shashi Velath at shashi@tingeofgreen.com