In a significant pre-Budget recommendation, the industry body PHD Chamber of Commerce and Industry (PHDCCI) has urged the government to establish a dedicated Green Bank or Climate Finance Facility. This proposal aims to channel substantial private capital into critical green technologies, including renewable energy, energy efficiency, and electric vehicles.
Key Recommendations for Green Financing
The suggestion was presented during a pre-Budget interactive session with key stakeholders from the banking, financial services, and insurance (BFSI) sector. Participants in the meeting strongly emphasized the necessity for specific budgetary support, risk-sharing mechanisms, and robust disclosure frameworks. These measures are seen as vital to enhance transparency and build confidence in green lending practices across the financial system.
To ensure its effectiveness, PHDCCI proposed that the envisioned Green Bank should have the authority to raise funds through instruments like green bonds or pooled financing. This capability is considered crucial for expanding the pool of long-term, patient capital required for large-scale climate-friendly infrastructure and technology projects.
Broader Economic Concerns Highlighted
Beyond climate-focused finance, the industry body also raised pressing concerns regarding overall credit availability and liquidity in the Indian economy. PHDCCI Chairman Gurmeet Chadha pointed out specific areas needing intervention. He called for increased and cheaper credit to Micro, Small, and Medium Enterprises (MSMEs), enhanced support for export-impacted sectors, and further liquidity infusion.
Chadha remarked on the transmission of monetary policy, stating, “I think the rate cuts haven't transmitted the way they should have.” This comment underscores a broader industry sentiment about the need for more effective measures to ensure easier access to capital for productive sectors of the economy.
Budget Session Ahead
These comprehensive recommendations come just ahead of the crucial Budget session of Parliament, which is scheduled to begin on January 28. The proposals from PHDCCI are expected to feed into the government's final deliberations as it prepares the Union Budget, setting the economic agenda for the upcoming fiscal year with a sharp focus on sustainable growth.
