By R. Suryamurthy
The most consequential number in NITI Aayog’s newly released study on Scenarios Towards Viksit Bharat and Net Zero is not 2047 or 2070. It is $22.7 trillion.
That is the cumulative investment India will need to mobilise to reach Net Zero emissions by 2070 under the preferred scenario—an amount that dwarfs India’s current GDP many times over. Even more revealing is the second figure embedded in the report: a projected external financing requirement of at least $6–6.5 trillion. This is the sum India is expected to attract from global capital markets, multilateral institutions, and climate finance mechanisms over the next four and a half decades.
The implications of this dependence are profound and insufficiently interrogated. India’s Net Zero pathway, as modelled by NITI Aayog, is not merely a technological or behavioural transition—it is a bet on the availability, affordability, and geopolitical neutrality of global capital. In effect, the country’s long-term climate strategy is tethered to a global financial system that has historically undersupplied, over-priced, and politically conditioned capital flows to the developing world.
This is the structural vulnerability at the heart of the Net Zero vision—one that optimistic scenario modelling cannot wish away.
The study acknowledges the financing gap candidly but treats it largely as a technical problem to be solved through domestic financial reforms and deeper integration with global markets. What it does not fully confront is the asymmetry of power embedded in this reliance.
Climate finance has consistently fallen short of promises. The much-cited $100 billion annual commitment by developed countries remains unmet, while private capital continues to price climate risk in developing economies at a premium. For India, which already faces higher borrowing costs than advanced economies, the assumption of sustained access to “cheaper external finance” is not a neutral baseline—it is a political and diplomatic challenge.
Moreover, large-scale external financing inevitably comes with influence. Whether through trade-linked carbon standards, investment conditionalities, or technology access restrictions, India’s development choices could increasingly be shaped by external climate regimes over which it has limited control. In this sense, Net Zero is not just an environmental target; it is a reconfiguration of economic sovereignty.
The study invokes the principle of Common but Differentiated Responsibilities, but the financing architecture outlined risks reproducing the very inequities that principle seeks to correct.
NITI Aayog’s scenarios rest on a clear—and politically convenient—premise: India’s coal consumption will continue to rise until 2047. This admission cuts through the rhetoric of green transitions and exposes the real sequencing at play. Growth comes first; decarbonisation follows later.
From a developmental perspective, this is understandable. Coal remains central to energy security, industrial competitiveness, and employment in several regions. But from a climate governance standpoint, it represents a deliberate deferral of transition costs—costs that will eventually surface with greater intensity.
Coal expansion today locks in assets, infrastructure, and regional economies that will face disruption tomorrow. The reports speak of efficiency gains and declining energy intensity, but absolute emissions matter for climate outcomes—and absolute coal use will keep rising for two more decades.
The critical question is not whether India can afford this delay, but who within India will pay for it later.
The Net Zero pathway presented in the NITI Aayog study implicitly assumes a relatively smooth, nationally aggregated transition. Yet India is not a uniform economic space. Developmental disparities between regions, states, and districts are deep and persistent—and the energy transition will intersect with these fault lines in unequal ways.
Coal-bearing states such as Jharkhand, Chhattisgarh, Odisha, and parts of West Bengal remain heavily dependent on mining-related revenues, employment, and public sector investments. For these regions, a future decline in coal is not an abstract climate goal but a direct threat to fiscal stability and livelihoods. The study recognises “social implications” but does not map out state-specific transition costs or compensatory frameworks.
By contrast, states like Gujarat, Tamil Nadu, Karnataka, and Maharashtra—already better integrated into renewable manufacturing, services, and global capital flows—are positioned to benefit disproportionately from clean energy investments and green industrial policies. The risk is clear: the green transition could amplify regional inequalities rather than reduce them.
Even within states, urban India is far better placed to electrify transport, adopt energy-efficient buildings, and participate in circular economy models than rural and informal settlements. Behavioural change under Mission LiFE may be aspirational in cities, but in regions still struggling with basic energy access, affordability—not lifestyle—is the binding constraint.
One of the most frequently cited claims in the report is that 85% of India’s 2047 infrastructure is yet to be built, offering a once-in-a-generation opportunity to embed climate-friendly design. While technically accurate, this statistic conceals a more complex reality.
Infrastructure is not built in a vacuum. It is shaped by land politics, state capacity, financing availability, and electoral incentives. Climate-friendly infrastructure often has higher upfront costs, even if lifecycle benefits are substantial. For fiscally constrained states and urban local bodies, the choice between short-term affordability and long-term sustainability is rarely straightforward.
Without robust fiscal transfers, risk-sharing mechanisms, and capacity building at the subnational level, the promise of climate-smart infrastructure could remain unevenly realised—further entrenching spatial inequalities.
The study’s optimism about India leapfrogging into global leadership in clean technologies rests on several assumptions: access to critical minerals, rapid scale-up of domestic manufacturing, and sustained investment in R&D. These are plausible—but not guaranteed—outcomes.
Critical minerals are increasingly concentrated in geopolitically sensitive supply chains. Manufacturing competitiveness depends on industrial policy coherence and trade diplomacy. And R&D investment remains modest relative to ambition. The leapfrogging narrative risks becoming selective—benefiting export-oriented sectors and advanced regions while leaving others behind.
Moreover, technology alone cannot resolve distributional conflicts. Grid expansion, land acquisition for renewables, and bioenergy deployment all generate local resistance. The reports model technological feasibility but largely abstract away from political contestation.
NITI Aayog rightly positions India’s development pathway as a potential role model for the Global South. Yet the credibility of that model will hinge on whether it delivers inclusive development at home.
A Viksit Bharat that meets aggregate GDP and emissions targets but deepens regional divides, displaces workers without adequate transition support, or ties long-term policy space to external capital would be a fragile template to export.
The reports provide a valuable analytical foundation. But they also expose the limits of scenario-based planning when confronted with political economy realities. Finance is not neutral. Transitions are not evenly distributed. And postponement carries its own costs.
Net Zero and Viksit Bharat are not incompatible goals. But aligning them will require confronting uncomfortable truths—about inequality, dependence, and delayed decisions—that modelling exercises alone cannot resolve. The real challenge now is not ambition, but execution with equity, sovereignty, and accountability at its core. (IPA Service)
