- Seven years after Bihar launched its green budget, the state has not made much progress on the climate and environment front.
- Bihar is one of the early movers that started presenting a green budget, but data suggests that progress has been slow on climate change mitigation and action on pollution, biodiversity conservation and waste management.
- Nationally, around eight states are currently presenting green budgets, and almost all the budgets follow the same pattern. Experts highlight the need to evaluate such green initiatives.
It has been seven years since Bihar introduced a green budget. However, even now, data from various sources suggests little to no improvement in key environmental indicators such as renewable energy, air pollution, biodiversity and waste management, among others.
The Bihar government presented its first green budget in 2020-21; this year, 2026, it presented its seventh, amounting to approximately ₹158 billion which is roughly three times the amount of the initial ₹56 billion budget. However, on key environmental indicators, the state’s performance remains poor.
For example, the energy sector accounts for roughly 65% of Bihar’s total greenhouse gas emissions, driven by coal-based power plants. The shift to renewable energy has been low, with renewable energy capacity for 2025-26 standing at 651 MW, up from 376 MW in 2020. The amount is significantly behind the Bihar State Pollution Control Board (BSPCB) call for increasing renewable capacity to 10,000 MW (10 GW) by 2030 and 28,000 MW (28 GW) by 2050 to achieve a ‘net zero’ pathway, as stated in its 2024 report. At the current pace, Bihar will reach around 900 MW, just about a tenth of that 2030 target.
Biodiversity data shows a similar trend. In 2019, Bihar had 4,550 wetlands spread across 389,713 hectares. By 2025, the number of wetlands reduced by 24 to 4,526 wetlands. As per the latest green budget data, in this period, the total area of natural water bodies has shrunk by 16,843 hectares, that’s about 70% the size of Patna, Bihar’s capital.
In waste management as well, Bihar’s performance remains poor. In 2019, before the introduction of the green budget, the state generated 2,272 tonnes of waste daily, with a processing rate of 51%. This figure rose to 58% in 2021; however, processing rates subsequently declined. In 2025, the rate remains significantly lower (around 30%) than that of 2021.
When analysing pollution data, a 2025 report by the Centre for Research on Energy and Clean Air (CREA) found that PM2.5 levels exceeded normal limits in 20 of the 23 monitored cities in Bihar. BSPCB data shows PM2.5 and PM10 concentrations fell in 2025 compared to 2020, but sulphur dioxide concentration rose from 8.6 to 11.4 ug/m3 over the same period. Bihar also failed to utilise the funds released under the National Clean Air Programme. As per the CREA report, Bihar used 60% (₹1.98 billion) of the ₹3.28 billion allocated by the central government.
However, a comprehensive picture of the impact of the green budget, according to the experts, will come out only when an independent evaluation is conducted, which is currently missing.
“It is important to conduct an impact evaluation to assess the actual effect of the green budget and the associated annual expenditure. Merely spending funds is insufficient; the budget should also reflect the outcomes of that expenditure, yet this is currently missing in the green budget,” Ashmita Gupta, economist and member-secretary at the Asian Development Research Institute (ADRI), told Mongabay-India. ADRI, a Bihar-based independent research organisation, was part of the team that helped the Bihar government prepare its first green budget.
Shailly Kedia, senior fellow at The Energy and Resources Institute (TERI), an independent policy research organisation, echoed this concern. While commending the government’s efforts in introducing the green budget, she said the next step would be to strengthen the link between the green budget and the Output-Outcome Monitoring Framework (OOMF). “This would help move beyond expenditure tracking towards measuring environmental outcomes and implementation effectiveness,” she told Mongabay-India.
A research study published in International Research Journal on Advanced Engineering and Management in March 2025, echoes this need for continuous monitoring. “Taking help of third-party audits of important green projects can help to know the status of progress. This also helps ensure accountability and transparency both,” the paper notes.
Anatomy of green budget
In 2020-21, Bihar presented a green budget with the aim “to proactively address Bihar’s ecological vulnerabilities.” The state follows the Rio Marker methodology, which helps the government identify and classify development projects based on how much they contribute to environmental and climate goals.
Before the green budget came into being, all schemes with green components were part of the concerned departments. But when the Bihar government decided to bring a green budget, it segregated all the schemes with green components and added them to the green budget. Since the environment, forest and climate change department is fully dedicated to climate change and the environment, the whole allocation for this department goes to the green budget.
Under the Rio Marker methodology, six slabs were established to categorise departmental schemes as ‘green activities’ based on the schemes’ green components, which can be as high as 100% and as low as 1%.
This year, the government included 298 schemes in the green budget, which is more than three times the 96 schemes included in the first green budget. But according to experts, the schemes need verification so that non-green components are inadvertently not included in the green budget.
“While many elements of the green budget may appear green, a thorough evaluation by green audit agencies is required to verify if these schemes truly constitute green practices,” Gupta told Mongabay-India.
Fund allocation and spending
Fund allocation data of the green budget suggests upward trends in between, but in the current fiscal year allocation decreased drastically.
Bihar’s first green budget, introduced in 2020 -21, allocated almost ₹57 billion, accounting for about 7% of the state’s total budget. The share rose to over 9.6% in 2021-22, remained largely unchanged the following year, and peaked at 12.5% in 2023-24 before declining. In 2026-27, the green budget accounts for almost 7.5% of the total budget, almost the same share as when it was first introduced.
On the other hand, the data indicates that the Bihar government has never fully utilised the allocated green budget funds. In 2021-22, close to 6.48% of the total budget was spent against an allocation of 9.68%. Similarly, in 2022-23, expenditure stood at 6.18% against an allocation of 9.73%. Spending improved in 2023-24 and 2024-25, when most of the allocated funds were utilised. Expenditure data for 2020-21, 2025-26, and 2026-27 is not available.
“This is not unusual. Nevertheless, the gap between allocation and expenditure probably signals both a limitation in implementation capacity, both administrative and technical, and inadequate planning in allocation of the resources to begin with,” Runa Sarkar, economist and a professor at the Indian Institute of Management Calcutta, told Mongabay-India.
National scenario of green budget
Before Bihar started presenting a green budget, it was Odisha which initiated the climate budget in fiscal year 2019-20.
Odisha has implemented Climate Budget Tagging (CBT) — a framework to integrate climate-related expenditures within government budgets. This approach enables systematic tracking, monitoring, and analysis of financial allocations directed toward climate change mitigation and adaptation.
So far, at least eight states, including Bihar and Odisha, are presenting green budgets.
Assam introduced a green budget in fiscal year 2023-24. In its green budget, Assam classifies schemes in four categories — highly favourable, moderately favourable, neutral and less favourable — according to their impact on the environment and climate change.
Meghalaya started presenting the State Climate Action Budget (CAB) in fiscal year 2023-224. It follows a climate budget tagging mechanism to identify climate expenditures based on their role in climate mitigation and adaptation.
Uttar Pradesh has been presenting a green budget since 2024-2025. The state follows a green budget tagging method, aligned with Nationally Determined Contributions (NDCs) and the State Action Plan on Climate Change (SAPCC). It then calculates the department-wise green relevance of the schemes and accordingly separates funds. In its first green budget, the Uttar Pradesh government has identified 26% of the total budget as green relevance.
Kerala has been presenting an environmental budget since 2024-25. It selected only those schemes that have a positive impact on the environment, such as schemes related to conservation of biodiversity and natural resources, climate change adaptation, among others.
Union territory Puducherry started presenting its green budget in 2023-24, and Rajasthan followed suit in 2025-2026.
Among all the states, Bihar’s approach is more comprehensive, said Shailly Kedia of TERI. TERI keeps a close eye on green budgets and has assisted a couple of states including Puducherry and Bihar, in preparing them. “Because it not only categorises expenditures based on environmental relevance, but also maps them against themes, activities, and SDGs,” she said, “Climate budgeting is generally a subset of green budgeting, with a stronger focus on climate mitigation and adaptation. Green or environmental budgeting adopts a broader approach and includes other environmental priorities such as waste management, air quality, water conservation, biodiversity, and pollution control alongside climate concerns.”
As a beginning, the green budget is a welcome step, but experts believe that now it needs an inclusive assessment.
“It would be good to initiate a comprehensive assessment, which among other things, should check alignment of the budget allocations and expenditures with the state action plan for climate change,” Runa Sarkar said.
Banner image: Kanti thermal power station, Bihar. Image by Muzaffarpur1947 via Wikimedia Commons (CCO 1.0).
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