Green Finance in India: Driving Sustainable Development and Economic Growth

Abstract

India, the second most populous country in the world with nearly 900 million rural population dependents on natural resources such as biodiversity, water, marine ecosystems, grasslands and mangroves for their livelihood. India’s agricultural and allied sectors, which is a climate sensitive sector provides employment to more than 50% of the population. In recent years India experiencing extreme events like the cloudbursts, heatwaves, cold-waves, cyclones and floods which are results of climate change. These dangers, along with the fact that India has been identified as one of the top three emitters of greenhouse gases, have led the Indian government to give climate change issues top priority. The government, in particular, views green finance as a crucial tool for preventing and adjusting to climate change. This paper examines pertinent data obtained from many secondary sources to try to understand the various concepts under green finance. A systematic approach to green finance involves a number of stakeholders, including financial institutions, the government and regulatory bodies. For investors, businesses, and banks attempting to implement green investing, a significant barrier has been created by a lack of knowledge about green finance. Allocating money for green projects and assets becomes challenging without a foundation for internal budgeting, accounting, and including these projects under Key Performance Indicators for financial institutions. A green economy is the driver and result of sustainable development. The researcher attempts to outline the importance of green finance for Indian Economy by giving reference to the short term and long-term goals of India to become a sustainable and green economy.