A Fiscally Responsible Green Stimulus

This paper suggests measures for a green stimulus. These measures would lead to demand and job creation and accelerate India’s transition towards cleaner air and a lower carbon economy. Recognizing that government revenues have fallen sharply and that there are many urgent claims on their limited resources, the paper explores ideas which can both create economic demand and jobs, and result in substantial private investment primarily through policy and regulatory interventions. By focusing on demand-side interventions, the proposals aim to support initiatives which would become independently viable, and which will, in turn, be able to generate employment. Some of the measures, such as those which aim to increase access to clean and reliable energy in rural areas, will also help power rural enterprises, creating virtuous cycles of investment and employment. By creating additional demand in the market, the measures being proposed would enhance the utilization of the liquidity created through the stimulus package the government has announced.