What is the Climate Budget that has been introduced in Odisha?

The Odhisa Finance Minister Niranjan Pujari introduced the Climate Budget during the State budget 2020-2021 with an aim to keep track of the government expenditure for climate change or to support mitigation and adaption actions to address climate change. The purpose to bring in a document on climate budget was to provide brief account of tracing public expenditure.

 Odisha is the first state to have a Climate Budget. The importance of such a move reflects the fact that climate has direct relevance to outcomes in agriculture, health, hunger, forests, water, etc. It will also help Government to decide in a case to Redevelop or safeguard the existing projects from the climate change impacts. Odisha, a coastal state in eastern India, is a disaster-prone region and witness tropical cyclones, floods and water stresses almost every year due to climate change. The population's dependence on coastal livelihoods makes them more vulnerable to such weather extremity.

To address the issue of climate change, Odisha formulated its State Action Plan on Climate Change (SAPCC) in 2010, which was revised for the period of 2018-23 and is under implementation. As desired by the Government of India, this report was again revised for 2021- 30 as per the commitments made in the SDG-NDC Report submitted by Government of India to UNFCCC to achieve the 2030 targets. However, public expenditure has not received significant focus in the Indian context and budgetary allocation and spending on climate change issues still remain a challenge. To overcome this, the State of Odisha undertook a rigorous cross sectoral analysis to come up with a Climate Budget in the Fiscal Year (FY) 2020-21.

 Odisha’s State Action Plan on Climate Change (SAPCC) 2015-23 has formed the basis of the state climate budget. The budget encompasses 11 departments- Department of Agriculture and Farmers’ Empowerment, Revenue and Disaster Management, Energy, Fisheries and Animal Resources Development, Forest & Environment, Health & Family Welfare, Panchayati Raj & Drinking Water, Rural Development, Commerce and Transport, Housing and Urban Development and Water Resource, in its analysis.

Climate budget is a step in the right direction, however there is a need for a big shift from this fragmented, piecemeal approach to a uniform national strategy for climate-responsive budgeting and reporting that can effectively integrate sub national actions with national expenditure and climate targets. Adopting a climate-responsive budgeting today will ensure the fiscal stability required in future to steer a smooth, just transition of the economy.

Hence, a climate-responsive budget will help nation in the projection of the economic policy to progress and to address climate change and achieve global climate goals, India needs to act on all fronts. This Union Budget will be the biggest opportunity for the country to take a leap forth in this direction.

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