Understanding environmental protection expenditure in India

Abstract


 Environmental protection (EP) refers to actions targeted to maintain or restore environmental quality associated with various economic activities through financial provision and initiatives. India’s suboptimal performance in EP and climate action so far raises an enquiry into the nature of priority assigned and provisions made for environmental protection expenditure (EPE). This paper examines the recent trends of EPE in India and finds a visibly lower share of EPE in total expenditure and lower rate of growth in comparison to other heads under Classification of the Functions of the Government (COFOG). Capital expenditure on EP has been less than current while subsidy, fund transfer, loans and advances have been near zero. The allocation for environment is inadequate in comparison to other budgetary heads. India fares poorly in EPE when compared to the leading OECD countries, who are global trendsetters for EPE. The current study points at the need for identifying EPE as a core priority area for designing sustainability policies for the long run, by suitably redesigning budget allocation and fund disbursement for implementation of environmental programmes.