Greening India’s Recovery Package - Ideas for Consideration

The document analyzes the Government of India's economic recovery package (~INR 20.90 lakh crore), arguing that it is primarily supply-side focused and largely 'sector-neutral' or 'brown', with only about 1.5% directly supporting green projects. It proposes specific modifications to existing fiscal and monetary measures—such as credit guarantees for MSME solar adoption, prioritizing renewable energy (RE) payments in DISCOM liquidity support, and greening the MGNREGA scheme—to generate immediate employment while advancing India's decarbonization goals.

• The Government of India's economic recovery package, totaling approximately INR 20.90 lakh crore (~$0.29 trillion), is estimated to have an effective fiscal stimulus of only INR 1.76 trillion, or 0.8% of GDP, as much of the package relies on existing funds and monetary measures.
• The recovery package is criticized for being primarily supply-side and lacking sufficient demand-side measures to address the collapse in household consumption and private investment, which could limit its ability to revive an economy expected to contract at least 9.5% in FY 2021.
• The current stimulus is largely 'sector-neutral' and lacks a focus on decarbonization; it is estimated that only about 1.5% of the package directly benefits green projects, while other measures, such as opening new coal mines, may send contradictory signals regarding sustainable development.
• Significant unpaid receivables owed by the government to the private sector, estimated at over INR 5,000 billion for corporates and MSMEs, hinder investment and increase business risk; specifically, DISCOMs owed power producers INR 905 billion as of March 2020, with INR 68.4 billion due to renewable energy producers.
• The document proposes 'greening' existing stimulus components by using partial credit guarantees to help MSMEs transition to distributed solar energy and energy-efficient equipment, and by directing DISCOM liquidity support to prioritize payments to renewable energy companies.
• Proposed green interventions for fiscal support include aligning affordable housing with green building standards to reduce carbon emissions by 35% and expanding the MGNREGA scheme to create labor-intensive green assets like mass-scale plantation and soil and water conservation.
• Retiring selected low-PLF coal power plants and replacing them with renewable energy projects could potentially save DISCOMs USD 1.6 billion annually and reduce India's GHG emissions by 113 million tonnes per year.

APA

Jena, L. P., Prasad, A., & Niazi, Z. (2020). Greening India’s Recovery Package - Ideas for Consideration. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2020/09/Greening-Indias-Recovery-Package-Ideas-for-Consideration.pdf

Chicago

Jena, Labanya Prakash, Anubha Prasad, and Zeenat Niazi. Greening India’s Recovery Package - Ideas for Consideration. Climate Policy Initiative, 2020. https://www.climatepolicyinitiative.org/wp-content/uploads/2020/09/Greening-Indias-Recovery-Package-Ideas-for-Consideration.pdf.

Wikipedia

{{cite report |last1=Jena |first1=Labanya Prakash |last2=Prasad |first2=Anubha |last3=Niazi |first3=Zeenat |title=Greening India’s Recovery Package - Ideas for Consideration |publisher=Climate Policy Initiative |date=September 2020 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2020/09/Greening-Indias-Recovery-Package-Ideas-for-Consideration.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{jena2020greening, author = {Jena, Labanya Prakash and Prasad, Anubha and Niazi, Zeenat}, title = {{Greening India’s Recovery Package - Ideas for Consideration}}, institution = {Climate Policy Initiative}, year = {2020}, month = sep, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2020/09/Greening-Indias-Recovery-Package-Ideas-for-Consideration.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }