Budget 2022: Air Quality Round-Up

The last year has seen significant interventions in the air quality regulatory framework. Parliament enacted the Commission for Air Quality Management in NCR and Adjoining Areas (CAQM) Act 2021, which put into effect a much-needed shift towards regional/airshed level governance. The Central Pollution Control Board constituted a team led by IIT Kanpur to review India’s National Ambient Air Quality Standards (NAAQS) after over a decade. Likewise, one was hopeful that the Union Budget 2022-23 would continue in that spirit and prioritize efforts to improve India’s air quality. Through this piece, we unpack the Budget, focusing on its implications for the current air quality regulatory framework and whether it gives impetus to new and ongoing interventions through adequate financial support.

A silent phase out of the Ujjwala scheme

A significant shortcoming of the budget is that it effectively drew an end to the Pradhan Mantri Ujjwala Yojana (PMUY) – a scheme launched in 2016 to make Liquified Petroleum Gas (LPG) accessible to poor households. The Budget makes no mention of the PMUY for the first time since its introduction in 2016. Further, the LPG subsidy, which includes funds for Direct Benefit Transfer, has decreased by nearly 90% since 2020-21.

The Economic Survey (2021-22), published a day before the Budget, suggests that the phase out of PMUY could be attributed to the ‘success’ of the scheme. It states that the scheme not only achieved its target of providing LPG gas connections to INR 8 crore beneficiaries 7 months ahead of the scheduled time but was also responsible for increasing the national LPG coverage from 61.9% in 2016 to 99.8% in 2021. This measure of success is short sighted and superficial given the ground reality. Over 50% of rural households continue to rely on traditional cooking fuels (here and here). While a majority of households have LPG first connections under PMUY, the complete transition to LPG through continuous and sustained usage has been unsuccessful because of the exponential  increase in the cost of refilling these LPG cylinders. 

This ill-conceived marker of success for the PMUY scheme has also resulted in the complete removal of kerosene subsidies. The Economic Survey makes it clear that kerosene use can be phased out given the successful transition to LPG and electricity connections. But the reality is that only three Indian states are kerosene free today. While kerosene subsidies do need to be phased out to encourage the use of cleaner fuels, the trifecta of zero kerosene subsidies, price hike of LPG cylinders and the economic setback from the pandemic have placed a heavy burden on households, forcing many to revert to firewood and dung cakes, with some even using plastic to meet fuel needs. This is a dangerous outcome for a country that lost 610,000 people to household air pollution in 2019 alone when LPG consumption was at its peak. In the interest of public health and alleviating financial burden, the removal of kerosene subsidies ought to have been coupled with LPG subsidies to facilitate an efficient and affordable transition to cleaner fuels.

A step back for the CAQM

The setting up of the CAQM with full time members, dedicated staff and substantial powers to effect airshed management represented a renewed effort towards air pollution mitigation efforts, although only in the NCR and adjoining areas. Despite its tumultuous start, the CAQM has passed important directions for the regulation of stubble burning, management of dust and the operationalization of GRAP among others. Most recently, on direction of the Supreme Court of India,  it invited suggestions from the public and experts in the field on permanent solutions for the year-round problem of air pollution. After promulgating two Ordinances and pushing through an Act of Parliament in a span of one year to constitute the CAQM, the Centre has now decreased its financial allocation by 15% (INR 20 crore in 2021-22 to INR 17 crore in the present budget).

This decrease, though seemingly minor, may have two serious repercussions- first, it is likely to restrict the CAQM’s functioning.  Recurring expenditures such as salary, allowances and rent alone are estimated to be INR 18 crore as per the financial memorandum of the CAQM Act. This was published nine months into the functioning of the Commission that had been previously set-up under an Ordinance. The reduced budget could prevent the CAQM from discharging its statutory mandate including undertaking periodic source apportionment studies, planning and executing air pollution control programmes, and instituting criminal action against polluters. Further, it may discourage the CAQM from broadening its composition to include representatives from health, rural and labour – a limitation of the CAQM that has been repeatedly highlighted (here and here). Second, the reduction in the CAQM budget could be seen as the Central Government's reluctance to improve India’s air quality. Preparation of the Budget is a deliberative process initiated by the Department of Economic Affairs and involving consultations with line Ministries, relevant stakeholders and financial advisers. Therefore, the outcome of this process may be considered as an indication of the Government’s priority actions. Reduction of the CAQM’s financial allocations reflects the lack of political will to effect change in air quality governance, without which the CAQM is destined to fail – much like its predecessor EPCA.

Transport: EVs at the forefront again

The Union Government maintained its bullish stance on electric vehicles (EVs) from the previous two budgets. The budget allocation for the FAME India subsidy scheme for EVs and charging infrastructure was boosted substantially. The allocation was increased to INR 2,908 crore from a revised estimate of INR 800 crore in the previous budget. This was also accompanied by the announcement of special mobility zones for zero fossil fuel vehicles.

Yet the most significant announcement was that of the proposed battery swapping policy and interoperability standards for EVs. This provides a way to overcome two important barriers preventing wider EV adoption - high purchase costs and the unavailability of space for chargers. The cost of batteries (a substantial sum) could be deducted from the purchase price of EVs, and the batteries provided instead as a service. Drivers would be able to replace their depleted batteries with fresh ones at swapping stations in just a few minutes, thus not relying on the availability of nearby private or public chargers.

The focus on EVs is commendable but, it is important to remember, that they made up just a small fraction of the vehicles registered in 2021, with early adopters facing many difficulties. While EVs have the potential to improve local air quality, extant factors could also lead to displaced emissions and increased non-exhaust emissions. The budget announcements on EVs are thus just a few more steps towards the still-distant goal of clean air.

A wider focus on public transportation is also needed. Despite the focus on developing urban mass transit in the announcement of the Pradhan Mantri Gati Shakti program and the planned implementation of ‘Transit Oriented Development’ for urban capacity building, funds were not allocated to public transport initiatives, outside of Metro rail projects.  An allocation of INR 23,875 crore – a slight increase from last year – was allocated to Metro rail projects and mass rapid transit systems. The National Capital Region Transport Corporation (NCRTC) - responsible for the development of the Regional Rapid Transit System (RRTS) - also had its budget increased to INR 4,710 crore from a revised estimate of INR 4,472 crore in FY 21-22.

Nothing significant to counter stubble burning

It has been less than four months since a heated argument regarding the contribution of stubble burning to air pollution was sparked before the Supreme Court. Yet, the budget announced very little to counter the problem which on some days contributed as much as 48 percent to ambient PM2.5 levels in the national capital and nearby regions. The proposed co-firing of five to seven percent biomass pellets in thermal power plants has been presented as a strategy to mitigate stubble burning. In a sector where a slew of strategies and technologies have been deployed with limited success (read more here and here), this latest initiative is also likely to be grossly insufficient. The situation will not be helped by the government’s decision not to allocate any funds to the scheme promoting agricultural mechanisation for in-situ crop residue management this year (for reference, INR 700 crore were allocated last year).

A change in the preference for growing paddy in unsuitable regions such as Punjab is needed, to effectively eliminate stubble burning. Instead, this budget only encourages the growth of paddy, rather than providing a sustainable and financially viable pathway away from it for farmers of the region. Following the success of the year-long farmers’ protest, the Finance Minister in her budget speech announced the direct payment of minimum support prices (MSPs) for wheat and paddy to the tune of INR 2.3 lakh crore. Simultaneously, funding for schemes that support the growth and sale of pulses and oilseeds - critical to crop diversification and a shift away from paddy - were reduced significantly.

No significant change to NCAP allocations

The National Clean Air Programme (NCAP) seeks to reduce air pollution levels in 132 cities across the country. The NCAP is clubbed with other items under “Control of Pollution” - the budget for which was marginally reduced this year to INR 460 crore (from INR 470 crore). Further, the Economic Survey shows that while NCAP funds have been disbursed to more states than in 2019-20, some states with very high levels of air pollution, such as Uttar Pradesh, were provided with drastically reduced funds in 2020-21. Perhaps also worth noting is that under the poorly conceived selection criteria for the NCAP, critically polluted cities in Haryana such as Faridabad, Jind, Hisar and Gurugram did not receive any funds at all.

Conclusion

The Budget does little to improve air quality management in India. While it holds promise for the transition to cleaner transportation, India’s wicked and pervasive problem of air pollution cannot be solved through EVs alone. Strengthening regulatory institutions and financing efforts that prioritize action to tackle all major sources of pollution are necessary in the pursuit for cleaner skies.

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(Environmentality is a collection of ideas, perspectives, and commentary by researchers at the Initiative on Climate, Energy and Environment, Centre for Policy Research, New Delhi. Views and opinions expressed in this blog are solely those of the authors. They do not represent institutional views.)