Boosting India’s Green growth
Today, India is witnessing a positive change in the corporate and government sector, with respect to green development, which is an opportunity for the country to exercise environmental stewardship, accelerate economic growth and strengthen governance, while achieving social justice.
Taking cues from various missions of the government such as Smart Cities, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and so on, Indian companies are embracing sustainability by going beyond the regulatory compliances, due to environmental consciousness and creating good reputation both in national and international markets by setting industrial benchmarks.
It is, however, critical to understand that the initial costs are higher. But, green buildings are resource efficient and save up to 40 per cent of the water and energy consumption, reducing operational cost for the future. Having an influential institutional financial eco-system can also help mobilise capital towards sustainable development.
The architecture of the financial system has indeed gained impetus in the past due to policy actions, like –
n Indian Banks Association, launching national voluntary guidelines for responsible financing
n Reserve Bank of India’s decision to include social infrastructure and decentralised renewable energy within the Priority Sector Lending requirements for banks
n Raising funds for the National Clean Energy Fund (NCEF) by increasing the coal cess
The non-banking financial institution, Indian Renewable Energy Development Agency (IREDA), under the administrative control of Ministry of New and Renewable Energy (MNRE), Government of India, also provides term loans for renewable energy and energy efficiency projects.
A two-stage green banking system may be conceptualised wherein a ‘Specialised Green Bank’ such as IREDA exists at national level, followed by regional green banks to leverage the existing financial infrastructures.
The intention of setting this ecosystem could be to declare and demonstrate the nation, the development of green economy, while enhancing the public confidence in environment policies and regulations.
Thus, developing a financial ecosystem for green developers leveraging on the global best practices and success models would boost the transformative green growth of India.
(The writer is CEO, GRIHA Council.Views are personal)