India’s climate and energy discourse has entered a more mature phase, marked by a shifting intent from binding targets to inculcating a system readiness approach and embedding it into policy design. The outlining of India’s climate action strategies in the Economic Survey 2025-26 is notable because it repositions climate change as a structural economic variable rather than an environmental externality. Keeping with this momentum, the forthcoming Union Budget must now translate this recognition into a credible development agenda that puts the development & improvement in quality of life first and at the same without losing sight of the climate commitments.
Economic Survey applies a “whole-of-economy” lens#
The Economic Survey has rightfully placed the climate change and energy transition discourse firmly at the centre of India’s development strategy, framing it through a “whole-of-economy” lens. It recognises mitigation, adaptation, and behavioural change as interconnected pillars of growth, rather than parallel policy silos- a much refreshing change. The Survey also underscored India’s progress in renewable energy deployment while candidly acknowledging constraints of high capital costs, land availability, grid congestion, and inadequate storage infrastructure. This reflects concerns that have long featured in India’s energy policy debates, but are now being articulated with greater institutional clarity.
While the Conference of Parties (CoP) have drilled “adaptation” and “mitigation” into our vocabulary, the Survey likewise emphasised on the growing energy demand that can be met with investments in energy storage as indispensable to managing variability in renewable-heavy grids, among others. It also highlights climate-resilient agriculture, calling for greater private capital mobilisation and technology adoption to safeguard productivity amid rising climate risks. To translate these technocratic concepts into reality within a macroeconomic architecture, equal attention must likewise be given to people-centric energy transition.
Thus, the triple bottomline of people, planet and profit must wed climate ambition with affordability, energy security, and institutional readiness. The framing must now depart from the run-down station of headline-driven climate narratives and instead foreground sequencing, resilience, and feasibility to guide budgetary framings of 2026-27.
Climate Action Must Be Development-Oriented and Steady#
While climate action must be development-oriented, it must also be development-consistent. India cannot afford disorderly transitions that undermine affordability, reliability, or social acceptance. In fact development has been rightly framed as a form of adaptation in the economic survey. Budget 2026-27 must therefore privilege durable systems and emphasis over the following points.
- Adaptation as a Binding Constraint
For India with its multifarious ecological variations and expansive geographies, our lived realities are extremely unique and thus, deserve differential treatment. While mitigation support has garnered centrestage, adaptation measures often fall through the cracks. It must stand to be a reminder that climate adaptation is not a technical exercise alone, but a lived condition shaped by uncertainty, humility, and coexistence with ecological forces. In the tide of the Sundarbans, survival is less about controlling nature but understanding its rhythms, retreating when necessary, and adapting livelihoods to its shifting boundaries. Flexible livelihoods, collective knowledge, and deep ecological attunement must receive the support and oversight of the government through continuous financing to ensure durability and scale.
While mitigation can be entrusted to private capital and markets, the variable nature of flood resilience, heat protection, water security, or climate-resilient agriculture have impacts which are natural disasters as well as social, making it difficult for private investors to capture predictable returns. So, it is well-placed that the public funding takes the lead. Adaptation costs disproportionately percolate, deepening vulnerability and inequality. Government funding therefore plays a redistributive role, ensuring that resilience is not a privilege but a public good. Budgetary allocations must reflect this distinction now.
State-level evidence supports this approach. In Rajasthan, analysis across six districts found solar pump adopters increased annual profits, cropping intensity, and area under fruits/vegetables, with sprinkler inclusion enhancing access in smaller holdings. World Bank research highlights grid-connected solar irrigation in Rajasthan conserving water while doubling farmer incomes through reliable supply and efficient practices. Similar models can be scaled nationally:
- Solar pumping linked with climate-resilient crops
- Promotion of agro-voltaics by beginning with a definition suited for Indian agri-ecology, facilitating dual land use between developers and farmers
Adaptation-linked mitigation schemes need not be a compromise but a design principle which simultaneously reduces emissions and strengthens resilience.
2. Quality of Life as a Climate Metric#
India is no longer a fledgling economy but a driver of economic transformations in the Global South. Our approach towards quality of life therefore must be in tandem with our geopolitical and developmental aspirations. Yet, the persistence of severe air and water pollution, particularly in the National Capital Region, reveals a disconnect between ambition and lived reality. NCR Delhi endures weeks of hazardous air each year, a condition that has become normalised rather than treated as an opportunity to be addressed. That this crisis unfolds in the very city that houses India’s political leadership underscores a deeper challenge: climate risks are no longer distant, abstract, or peripheral. They are immediate, urban, and profoundly human. If climate policy is to command legitimacy, quality of life- clean air, reliable water, thermal comfort, and public health- must be treated not as co-benefits, but as core metrics of climate action. Development that delivers growth without livability ultimately erodes its own foundations. In this context, Mission LiFE underscores that transitions are not achieved through infrastructure alone, but through everyday choices enabled by access, affordability, and supportive systems. However, behavioural change cannot be expected in the absence of supportive public investment. Mission LiFE must therefore be complemented by fiscal and infrastructural commitments that make sustainable choices feasible rather than aspirational. Citizens can be moved to reduce emissions only when clean air is protected and ensured through regulation, public transport is reliable and safe, energy-efficient housing is affordable, and decentralised energy solutions improve daily resilience. In any case, retrospectively climate policy is ultimately judged by its impact on everyday life. Budget 2026 must explicitly link climate spending to quality-of-life improvements, especially for rural and low-income households in urban and peri-urban areas.
3. Deepening Decentralised Renewable Energy (DRE)#
Decentralised renewable energy (DRE) must occupy a central place in the forthcoming Budget.
Under the PM Surya Ghar scheme, progress to date suggests that only a fraction (23.9 Lakh) of the annual target of solarising 1 crore households has been realised, making the next fiscal year decisive. Achieving the remaining capacity will require not just additional funding, but a recalibration of incentives and design, particularly to expand uptake beyond urban households.
Strengthening through higher incentives for rural and semi-urban households is therefore essential. In rural India, electricity access is often characterised not by absence, but by unreliability, i.e., frequent outages, voltage fluctuations, and seasonal disruptions that directly affect livelihoods, education, and health. Equally important, then, is the introduction of behind-the-meter storage, supported through targeted subsidies. When designed this way, DRE can support micro-enterprises, cold storage, digital services, and household welfare simultaneously.
PM-KUSUM must evolve beyond a pump-deployment scheme into a broader tool for power system reform, aligned with distribution-sector objectives under RDSS. A coherent pathway can be articulated through four “S”: separating agricultural and domestic feeders, strengthening those feeders under RDSS, solarising agricultural supply, and speeding up implementation, where bureaucratic delays have proven costly. At present, these interventions are split across ministries and programmes, diluting their impact. The Budget should explicitly incentivise coordination and pooled financing between PM-KUSUM and RDSS to unlock system-wide benefits-reducing DISCOM losses, improving supply reliability, and creating durable political support for agriculture and power sectors reform.
4. Storage and Critical Minerals: Beyond Capacity to Security#
As renewable penetration rises, energy storage becomes an off-ramp to energy transition pathways. Since these underlie materials which have gained front row seats to trade wars, solutions must be sought. While institutional mechanisms for critical minerals exist, the Budget must move beyond exploration to strengthening supply chain resilience. India’s current import dependency for critical and strategic minerals is staggeringly high, leaving an indelible imprint on its energy security and industrial competitiveness.
The concentration of supply chains cannot be escaped but can be circumvented by partnering with resource-rich and under-invested nations. India must identify such geographies to create partnerships that withstand external shocks, mercurial tariffs and export restrictions. Such efforts of mineral diplomacy can help ease the geopolitical lid of pressure by diversifying sourcing, sharing risk, and building mutual economic stakes.
Conclusion#
At the cusp of the century’s second half, the Budget 2026 must look forward, anchored not in legacy structures, but in future climate and energy needs towards a Viksit and Aatmanirbhar Bharat. Time and circumstance is ripe to nudge India to a new millenia of climate-responsive development. While the planet has boundaries, the hope for an equitable, welfare-enhancing quality of life does and should not be constrained. After all, any policy is successful when it delivers better lives, not just bigger numbers.
Meheli Roy Choudhury is a Research Consultant at Chintan Research Foundation
Dr. Debajit Palit is the Centre Head at Chintan Research Foundation.
Clear Cut Climate Desk
New Delhi, UPDATED: Jan 31, 2026 12:45 IST
Written By: Meheli Roy Choudhury, Dr. Debajit Palit
