India's budget lacks environmental roadmap, say green groups

India has reduced customs duty on biodiesel and a key component for wind turbine manufacturers in its latest budget, but environmentalists say more needs to be done to attract green investments and support conservation efforts.

The $200bn (£123bn) budget for 2009-10, announced yesterday, lowers the customs duty on biodiesel from 7.5 to 2.5 per cent and also reduces duty on permanent magnets – a critical component of wind-operated electricity generators – to five per cent, down from 7.5 per cent.

Meanwhile, four government institutes involved in research related to forests, geology and the ecosystem will receive grants totalling $30 million (£18.5 million), while tax benefits to non-governmental organisations (NGOs) will be extended to include trusts focused on preserving and improving the environment.

However, while Finance Minister Pranab Mukherjee assured green groups that initiatives under the National Action Plan on Climate Change will be covered under the budget, he admitted that an exact figure would not be decided until the end of the year.

The plan, announced last year, is intended to set out strategies for increasing investment in areas such as solar power, energy efficiency, sustainable agriculture and climate change adaptation.

Uncertainty also surrounds India's draft plan to invest $22bn (£13.5bn) in solar energy over the next 30 years. It was not mentioned in the budget.

Kishor Rithe, founder of Indian wildlife conservation group Satpuda Foundation, told the Times of India newspaper that the budget was " disappointing", adding that green NGOs would benefit little from the tax exemption, which only covers donations up to $2,000 in size.

Raman Mehta of Climate Action Network South Asia, a network of 360 green NGOs, told the Economic Times newspaper that the budget would do little to bolster India's position in the emerging global clean tech market. "This budget could have taken the opportunity to attract green investments, but has not done that," he said. "There is no change in the trajectory of economic planning."