Pranab hopes to green economy, NGO unimpressed (Lead)

Finance Minister Pranab Mukherjee Monday cut customs duty on a key wind turbine component and on bio-diesel while presenting his 2009-10 budget proposals, hoping the move would please environmentalists. But an international NGO said he had done nothing to change the direction of India towards a greener economy.

Mukherjee said he would finance the eight national missions under the National Action Plan on Climate Change unveiled by Prime Minister Manmohan Singh last year, but did not specify a number. The missions are still being finalised, and Minister for Environment and Forests Jairam Ramesh had said last week they would be ready by the end of 2009.

The finance minister reduced customs duty on bio-diesel from 7.5 percent to 2.5 percent. He also said: "It is imperative that the contribution of new and renewable energy sources of power is enhanced if we have to successfully combat the phenomena of global warming and climate change. I am reducing the basic customs duty on permanent magnets - a critical component for Wind Operated Electricity Generators - from 7.5 percent to 5 percent."

Responding to this, Raman Mehta of Climate Action Network South Asia - a coalition of green NGOs - told IANS: "This budget could have taken the opportunity to attract green investments, but has not done that. There is no change in the trajectory of economic planning."

Mukherjee pointed out that the government had recently set up the National Ganga River Basin Authority and said the "budgetary allocation under national river and lake conservation plans are being increased from Rs.335 crore ($67 million) in 2008-09 to Rs.562 crore ($112 million) in 2009-10".

Mehta said the National Ganga River Basin Authority was the much-reviled 1985 Ganga Action Plan by another name, "which had been planned very badly, so there is nothing great about this".

The finance minister also gave a special one-time grant of Rs.100 crore to the Indian Council of Forestry Research and Education, Dehradun, and Rs.15 crore each to Botanical Survey of India and Zoological Survey of India. An additional amount of Rs.15 crore was allocated for Geological Survey of India.

Extending tax benefits to green NGOs, Mukherjee said: "Under the present provisions of section 2 (15) of the Income Tax Act, 'charitable purpose' includes relief of the poor, education, medical relief, and the 'advancement of any other object of general public utility'...

"I propose to provide the same tax treatment to trusts engaged in preserving and improving our environment (including watersheds, forests and wildlife) and preserving our monuments or places or objects of artistic or historic interest, as is available to trusts engaged in providing relief of the poor, education and medical relief."

Last updated on Jul 6^th, 2009 at 15:43 pm IST--IANS