Union Budget 2025: Environment ministry budget increases, but coastal mission and crop insurance face cuts

Finance Minister Nirmala Sitharaman presented the second budget for the third term of the NDA government led by Prime Minister Narendra Modi in Parliament on February 1, 2025, envisaging an expenditure of ₹50.65 lakh crore, an increase of 7.4% over the current fiscal year. 

MoEFCC budget increased by 9%

As part of this budget, ₹3,412.82 crore was allocated to the Ministry of Environment, Forest, and Climate Change (MoEFCC)—a 9% increase from ₹3,125.96 crore the previous year. In the interim budget of February 2024, ₹3,265.53 crore was estimated. Though, on July 23, 2024, the central government allocated ₹3,330.37 crore, later revised to₹3,125.96 crore as per the Union Budget 2025.

Before we further break down the budget allocation, Sachchida Nand Tripathi, a professor and sustainability expert at IIT Kanpur, noted that the budget indicates investing in a climate-friendly economy… he added, “More focused initiatives for air pollution, river rejuvenation, and adaptation measures beyond agriculture would strengthen India's vision for a greener future.”

While the budget prioritises clean energy, experts argue that it overlooks critical environmental challenges like air and water pollution, waste management, and industrial pollution.

Dr. Shailly Kedia, associate director for sustainable development and outreach at TERI, says, 

“Key sustainability issues—such as waste management, coastal resilience, and biodiversity—are absent from the Output Outcome Framework for 2025-26. India’s economic growth must not come at the expense of environmental collapse.”

“Agriculture—first engine of development” 

While presenting the budget, Finance Minister Nirmala Sitharaman said that the agriculture sector is one of the four important 'engines' in India's development journey. The government has allocated ₹1,37,757 crore to the ministry, which makes up 2.7% of the total Union Budget. This amount is 2.5% lower than the revised budget for 2024–25. The government in 2024-25 initially planned to spend a certain amount on the Ministry of Agriculture and Farmers' Welfare. However, as the year progressed, the actual spending estimate was revised upward by 6.8%, indicating that more funds were allocated than originally budgeted.

She highlighted initiatives for climate-resilient agriculture and the national mission for high-yielding seeds designed to develop crops adaptable to extreme climates. 

The government has also announced PM Dhan Dhaanya Krishi Yojana. As per the announcement, the scheme will benefit farmers by covering 1.7 crore farmers in 100 districts with low productivity, moderate crop intensity, and below-average credit access. At the same time, the National Mission on High Yielding Seeds will benefit farmers by ensuring commercial availability of more than 100 seed varieties, developing and propagating climate- and pest-resilient high-yielding seeds, and strengthening research on high-yielding seed varieties. Till now, over a hundred climate-proof seeds have been released in July 2024.

Devinder Sharma, an Agriculture Trade Policy expert, said, 

“The government has not talked about farmers’ income or agriculture income. Without considering this, just keeping agriculture as a top priority wouldn’t make any difference because if farmers do not have a stable income, they will not be able to deal with the challenges posed by climate change.”

The government has also announced Mission for Aatmanirbharta (Self-Reliance) in Pulses. The six-year initiative will focus on pigeon peas, black grams, and red lentils with a total budget of 1000 crore rupees. However, Pawan Nagar, a farmer from Obedullaganj in Mahdya Pradesh, responded to the announcement with a sense of frustration. He expressed his frustration regarding the soil health scheme; he said,

"Soil testing feels like a mere formality. Soil health cards are issued, but no one knows how to use them."

Despite being referred to as the engine, budget cuts in critical areas provide a different perspective. The Pradhan Mantri Fasal Bima Yojana (PMFBY), the government’s key crop insurance scheme, has received its lowest allocation in seven years, dropping nearly 23% from ₹15,864 crore (2024-25 RE) to ₹12,242.27 crore (2025-26 BE). This cut comes despite the Econmic survey acknowledging the increasing impact of extreme weather on crop yields. 

Harjeet Singh, climate activist and founding director of the Satat Sampada Climate Foundation, observed, “While the budget acknowledges the need to boost agricultural production and resilience, it falls short in adaptation funding. Without real investment in climate adaptation, farmers will be left defenseless against increasingly erratic and extreme weather.”

Launched in February 2016, PMFBY aims to provide insurance against crop failure and to stabilise farmers’ income. The government’s economic survey, released before the budget, emphasised PMFBY’s role in protecting farmers against natural calamities, pests, and diseases. However, the budget cut raises concerns about its effectiveness. The government data shows a decline in insurance claims paid to farmers, from ₹29,444.66 crore in 2018-19 to ₹10,391.39 crore in 2023-24. 

The reduction in PMFBY’s allocation comes as climate change-driven disasters worsen. Extreme weather, particularly heatwaves and extreme rainfall, has increased significantly. Between 2022 and 2024, India experienced heat waves on 18% of days, compared to 5% in 2020 and 2021. Reports suggest extreme weather caused more crop damage in 2024 than in the previous two years.

Nuclear energy expansion

Finance Minister Nirmala Sitharaman made significant announcements regarding nuclear energy, emphasising its role in India’s clean energy transition. She outlined a goal of developing at least 100 GW of nuclear energy by 2047 under the Nuclear Energy Mission for Viksit Bharat. To encourage private sector participation, she proposed amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act, which currently limit private investment in the sector due to the liability clause.

However, despite these ambitious plans, the Department of Atomic Energy (DAE) budget was reduced by ₹402 crore, and the allocation for the Nuclear Power Corporation of India Ltd. (NPCIL) was cut by ₹472 crore. The push for private investments follows reports that India is seeking $26 billion from major companies like Reliance, Tata Power, Adani, and Vedanta to expand nuclear energy generation by 2040.

The budget also introduced a Nuclear Energy Mission for research and development of Small Modular Reactors (SMRs), with an outlay of ₹20,000 crore and a target of operationalising at least five indigenously developed SMRs by 2033. While this marks a shift toward nuclear innovation, experts have raised concerns about safety, costs, and the overall direction of India’s energy policy. 

Dr. Chandra Bhushan, president and CEO of iForest, an independent non-profit environmental research and innovation organisation, stated, “The focus on clean energy is a positive step, but it misses the opportunity to address critical environmental issues such as air and water pollution, waste management, and industrial pollution.”

The budget for the Commission for Air Quality Management nearly doubled from ₹16.23 crore to ₹38.98 crore. The National Institute of Wind Energy, Bioenergy, and Solar Energy institutions saw increased allocations, with their total budget rising from ₹60 crore (revised to ₹62 crore) to ₹73.4 crore. 

Experts also emphasised the need for more targeted initiatives to address air pollution, river rejuvenation for water security, and climate adaptation beyond agriculture. They believe such measures would have further strengthened India’s vision for a cleaner and greener future.

50 crore for the Conservation of Natural Resources and Ecosystems

The budget increased funding for ecosystem conservation, wildlife protection, and expanding forest cover. The National Mission for a Green India, aimed at expanding forest cover, protecting existing forests, and preventing wildfires, will receive ₹220 crore in 2025-26, up from ₹160 crore last year. Similarly, funding for natural resource and ecosystem conservation has increased from ₹30 crore to ₹50 crore. The biodiversity conservation budget has nearly tripled from ₹3.5 crore to ₹10 crore.

The government allocated ₹35 crore for conserving aquatic ecosystems, up from ₹23.5 crore in 2024-25. The funding for Project Tiger and Project Elephant, which focus on protecting respective animals and their habitats, increased from ₹245 crore to₹290 crore.

Cuts for coastal mission

While some budgetary allocations increased, others faced reductions. The National Coastal Mission’s budget dropped from ₹50 crore to ₹8 crore last year and ₹2 crore this year. In contrast, the Forest Survey of India (FSI) budget increased from ₹46 crore (revised to ₹51.93 crore) to ₹54.13 crore. The National Zoological Park received ₹44.32 crore, up from ₹23 crore (revised to ₹30.54 crore) last year.

For conservation efforts, the ‘Conservation of Natural Resources and Ecosystems’ spent ₹30 crore of the ₹43.5 crore allocated last fiscal year. This year’s allocation is ₹50 crore. Low spending was noted in ‘Biodiversity Conservation’ (₹3.5 crore of ₹5 crore allocated) and ‘Conservation of Aquatic Ecosystems’ (₹26.5 crore of ₹38.5 crore allocated). The budget for ‘Integrated Development of Wildlife Habitats’ remained at ₹450 crore, though only ₹400 crore was spent last year.

The Jal Jeevan Mission (JJM), aimed at providing safe drinking water, has been allocated ₹67,000 crore. The program has been extended until 2028 to ensure 100% coverage.

The ‘Forest Fire Prevention and Management’ scheme had a budget of ₹50 crore last year, with only ₹36 crore spent. The allocation remains unchanged at ₹50 crore this year. Similarly, the National Coastal Mission spent only ₹8 crore against ₹50 crore last year, resulting in a budget cut to ₹2 crore for this fiscal year.

The ‘Environment Knowledge and Capacity Building’ budget increased to ₹102.7 crore from last year’s ₹78.34 crore (revised to ₹99.94 crore). In the ‘Environment Education, Awareness, Research, and Skill Development’ component, only ₹65 crore was spent from the ₹87.4 crore allocated last fiscal year. The current budget sets aside ₹101.96 crore for this initiative. 

Several autonomous institutions saw budget changes. The Indian Council of Forestry Research and Education (ICFRE) and the Wildlife Institute of India (WII) received a 20% budget increase, while the Indian Institute of Forest Management (IIFM) faced a reduction from ₹13 crore to ₹10 crore.

India’s Marine Sector

FM Nirmala Sitharaman emphasised tapping into India’s marine sector by creating a sustainable fisheries management framework, focusing on the Andaman and Lakshadweep islands. While some fish workers view this as economic growth, others are concerned about its impact on marine ecosystems and struggling fish stocks due to climate change and overfishing.

A 2022 report from the Central Marine Fisheries Research Institute (CMFRI) revealed that over 4% of India’s fish stocks are overfished, and 8.2% are beyond sustainable levels. Critics worry that the government’s focus on unlocking the fishing potential of these island clusters could worsen the situation. Sustainable fishing methods like pole-and-line fishing in Lakshadweep and traditional fishing in the Andamans have supported local communities while preserving fish stocks.

Experts fear that large corporations may enter the scene, leading to overfishing and resource depletion. Fish stocks, including mackerel and sardines, are declining along India’s coasts, and climate change is worsening it, with fish moving to cooler waters.

The union budget 2025-26 shows the government’s commitment to environmental protection, with a 9% increase in funding for the MoEFCC. More money has been allocated for forest conservation, wildlife protection, and air quality management, highlighting efforts toward a greener future. But more dedicated efforts are required. The budget also has some gaps. 

The funding for coastal protection and crop insurance has been reduced, raising concerns about how well farmers and coastal communities can cope with extreme weather. While the push for marine sector growth could boost the economy, experts worry it may harm fish stocks and marine ecosystems. Experts say more needs to be done beyond saving forests and wildlife, as extreme weather events are on the rise in India. In the present budget, the government has focused on agriculture as a crucial part of India’s climate strategy, integrating clean tech solutions and resilient farming practices. 

Essentially, some things have been done, but a lot more is required.

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