The Indian government is prioritizing a green transition to reduce dependence on finite fossil fuels, curb greenhouse gas emissions, and mitigate climate change. To achieve this goal, the government is allocating significant budgetary support to the renewable energy sector, particularly to solar energy, nuclear energy, and green mobility initiatives.
The budget allocation for the Ministry of New and Renewable Energy has seen a 39% increase in nominal terms in 2025-26 compared to 2024-25. Within this, solar energy has received a 48% increase in budget allocation, with a focus on programs such as PM Surya Ghar Muft Bijli Yojana, which aims to solarize one crore households, and KUSUM, which aims to increase the income of farmers and promote the setting up of standalone solar pumps.
The government is also allocating significant funding to nuclear energy, with a dedicated Nuclear Energy R&D Mission for Small Modular Reactors (SMR) and a 12% increase in gross budgetary allocation to the Department of Atomic Energy.
While there has been an increase in allocation to other renewable energy sources, such as wind energy, it is still a relatively small increase compared to the allocation to solar and nuclear energy. The budget has also not been forthcoming in terms of encouraging growth in alternative renewable sources like pump storage electricity.
To address the challenges of transitioning to renewable energy, the government is promoting the development of energy storage infrastructure, with a focus on enhancing battery storage and grid infrastructure. The budget has also allocated funds for the Production Linked Incentive (PLI) Scheme for the National Programme on Advanced Chemistry Cell (ACC) Battery Storage, which is expected to drive significant growth in key battery-consuming sectors.
In terms of green mobility, the government is promoting electric mobility initiatives, with a focus on promoting the adoption of electric vehicles, public charging stations, and manufacturing electric passenger cars in India.
Overall, the government’s initiatives reflect a commitment to sustainability and a focus on renewable energy generation, with significant allocations to solar and nuclear energy, as well as green mobility initiatives. However, the budget also faces challenges in mobilizing resources for development, explicitly prioritizing social sectors while supporting the goals of Viksit Bharat and Atmanirbhar Bharat.