Taxes could be lowered but challenges facing country demand resources: Nirmala Sitharaman

New Delhi: Finance minister Nirmala Sitharaman said on Tuesday that taxes could be lowered if not for the resources required for meeting “severe” challenges such as climate change that are confronting the country. 

Speaking at the eleventh convocation of Indian Institute of Science Education and Research (IISER) in Bhopal, the finance minister said that in spite of not receiving any external funds for energy transition, India had financed its clean energy initiatives on its own and is leading the path—an effort that requires domestic resource mobilization. 

Had it not been for the challenges facing the country, taxes could have been kept lower, the minister suggested. The government was widely critcized on social media and by opposition parties after Sitharaman's annual budget presented in July made no proposal to bring down taxes.

Also Read: We need better information on the impact of climate change

“Being the finance minister, it doesn't give me motivation when I have to answer people about why are our taxes like this? Why can't it be lower than this? I wish I can bring it down to almost nil, but India's challenges are severe and the challenges will have to be overcome,” the minister said.

Sitharaman explained that India has to show leadership in advanced chemistry-related innovations in order to move ahead in storing energy generated by renewable sources. The government has invested heavily in this, the minister said.

India made several commitments to moving towards renewable energy

India is a leader in implementing the global commitments given in various climate-related conferences including in Paris, UAE and Scotland, the minister said. 

“India made a lot of commitments to moving towards renewable energy. But the challenge in that is we have put our own resources. The world promised a lot of my money towards transitioning from fossil fuel to renewable energy, but that money is yet to come. But India didn't wait. The promises given in Paris have all been fulfilled with our own funds,” the minister said.

Also Read: Taxes increased because…: Finance Minister Nirmala Sitharaman opens up on Budget 2024

The Green Climate Fund, set up in 2010 as a dedicated financing vehicle for developing countries, serves as the financial mechanism of the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement. Since the approval of the first project funding in 2015, GCF has built a portfolio of more than 100 projects, the Fund says on its website. 

However, such global efforts have been hobbled by a lack of financing by rich industrialized nations, in spite of their historic role in creating climate change. 

As per information available from the ministry of environment, forest and climate change, India has met two of its climate goals ahead of time—reducing the emission intensity of the economy by a third from 2005 levels and having two-fifth of its power generation from non-fossil fuels. 

Their original deadline was 2030.