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As part of the Union Budget 2024–25 (specifically mentioned in Paragraph 104 of the Budget Speech), the Government of India has taken a major step toward supporting the country’s green goals. The Department of Economic Affairs, Ministry of Finance, has released a Draft Framework for India’s Climate Finance Taxonomy and is now inviting suggestions and feedback from experts and the public. Click here to download Draft Framework.
What is Climate Finance Taxonomy?
In simple terms, a Climate Finance Taxonomy is a structured way to identify which activities, projects, and investments are truly helpful in fighting climate change. It helps in:
- Directing funds to eco-friendly and sustainable projects
- Supporting climate adaptation (adjusting to the effects of climate change)
- Promoting climate mitigation (reducing greenhouse gas emissions)
- Helping India move toward its Net Zero target by 2070
What Was Announced in the Budget?
The Union Finance Minister said that the government will develop a climate finance classification system (taxonomy) to:
- Increase availability of funds for climate-friendly initiatives
- Help meet India’s climate goals
- Promote a smooth and inclusive green transition
What Does the Draft Framework Contain?
The Draft Framework includes:
- The goals, guiding principles, and methodology for developing the taxonomy
- How activities and projects will be classified as climate-friendly or climate-supportive
- Links between climate goals and the broader national vision of “Viksit Bharat by 2047” (a developed India by 2047)
- The first version of the framework, which will later be expanded through sector-specific guidelines (sectoral annexures)
Why Is This Important?
This taxonomy will:
- Help identify and prioritize green projects
- Ensure that funds are used for genuine climate action
- Make it easier for investors, banks, and the government to support climate-related projects
- Ensure India’s transition to clean energy is sustainable, affordable, and reliable
How Can You Share Your Feedback?
- The government wants input from climate experts, researchers, industry stakeholders, and the public
- You can email your comments to:
aditi.pathak[at]gov[dot]in - Please use the subject line: “Comments on the Draft Framework for the Taxonomy”
- Deadline to send comments: 25th June 2025
After reviewing all the feedback, the final version of the framework will be released by the Department of Economic Affairs, Ministry of Finance.
Format in which the information/comments may be provided:
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