**Summary:**
In response to Lok Sabha Unstarred Question No. 114 on Green Financing, the Ministry of Finance acknowledges the growing global importance of green financing to meet commitments under the UNFCCC and the Paris Agreement. The government is actively promoting green financing through a multi-pronged approach encompassing policy and regulatory measures, direct budgetary support, and specific financial instruments.
Key initiatives include:
* **National Action Plan for Climate Change:** Providing direct budgetary support.
* **Production-Linked Incentive (PLI) Schemes:** Supporting high-efficiency solar photovoltaic modules, advanced chemistry cell battery storage systems, and the automotive and auto-component sectors.
* **SEBI Regulatory Framework (2017, Revamped):** Establishing and expanding the scope of green debt securities to include pollution prevention and control, and eco-efficient products.
* **Introduction of Specialized Bonds:** Blue bonds (water management, marine sector), yellow bonds (solar energy), and transition bonds as subcategories of green debt securities.
* **IFSCA Regulatory Framework:** Encouraging the growth of Green Bonds, Social Bonds, Sustainability Bonds, Sustainability-linked Bonds, and other labelled bonds.
* **Sovereign Green Bonds (2022):** Mobilizing resources for eligible green projects across Ministries.
* **RBI Framework for Acceptance of Green Deposits:** Fostering the green finance ecosystem.
* **Priority Sector Lending:** Bank loans for renewable energy projects up to ₹30 crore are eligible.
Key Entities Referenced
Shri Y S Avinash Reddy: Member of Lok Sabha who raised the question about green financing.
Shri Pankaj Chaudhary: Minister of State in the Ministry of Finance who provided the answer to the question.
UNFCCC: United Nations Framework Convention on Climate Change, an international environmental treaty.
Paris Agreement: An international agreement on climate change under the UNFCCC.
National Action Plan for Climate Change: A Government of India initiative for addressing climate change.
SEBI: Securities and Exchange Board of India, the regulator that introduced the framework for green debt securities.
International Financial Services Centres Authority of India: Regulatory authority that specified the framework to encourage the growth of Green Bonds, Social Bonds, Sustainability Bonds and Sustainabilitylinked Bonds.
RBI: Reserve Bank of India, which introduced the Framework for Acceptance of Green Deposits.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF ECONOMIC AFFAIRS
LOK SABHA
UNSTARRED QUESTION NO 114
TO BE ANSWERED ON 21st JULY 2025
GREEN FINANCING
114. Shri Y S Avinash Reddy
Will the Minister of FINANCE be pleased to state:
(a) whether there is indeed a growing case for green financing around the world;
(b) if so, the steps taken by the Government to promote and boost green financing in the country;
(c) whether the Government is planning to provide preferential treatment for financing related to
green and sustainable projects; and
(d) if so, the details thereof and if not, the reasons thereof?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) Green financing is gaining traction globally as countries seek to implement their
commitments under the UNFCCC and its Paris Agreement.
(b) to (d) Green financing is being promoted through several policy and regulatory measures
in addition to direct budgetary support under the National Action Plan for Climate Change and
production-linked incentive schemes for high-efficiency solar photovoltaic modules, advanced
chemistry cell battery storage systems, and the automotive and auto-component sectors.
Further, SEBI introduced the regulatory framework for the issuance of green debt securities as a
mode of sustainable finance in 2017, which was revamped to expand the scope of the definition of
‘green debt security’ to cover pollution prevention and control, eco-efficient products, etc. The
regulator has also introduced the blue bonds (related to water management and the marine
sector), yellow bonds (related to solar energy) and transition bonds as sub-categories of Green
debt securities. International Financial Services Centres Authority of India has also specified the
necessary regulatory framework to encourage the growth of Green Bonds, Social Bonds,
Sustainability Bonds, Sustainability-linked Bonds and other labelled bonds.
In addition, the Government of India introduced the Sovereign Green Bonds in 2022 to mobilise
resources for eligible green projects across Ministries. Other measures, such as the RBI’s
‘Framework for Acceptance of Green Deposits’, aim at fostering and developing the green finance
ecosystem in the country. Further, bank loans for renewable energy projects up to a limit of ₹30
crore are eligible under the Priority Sector lending.
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