Currency and Finance Report 2022-23

• 08 May 2023

On May 3, 2023, the Reserve Bank of India's (RBI) Department of Economic and Policy Research (DEPR) released a report on Currency and Finance 2022-23.

Theme: Towards A Greener Cleaner India

Key Findings

• Expenditure for Adapting to Climate Change: India's expenditure for adapting to climate change would reach ₹85.6 lakh crore by 2030.
• Accelerated Reduction in Energy Intensity: To achieve India's net-zero target by 2070, there must be an accelerated reduction in energy intensity of GDP and a significant improvement in the country's energy mix in favour of renewables.
• Green Financing Requirement: India's green financing requirement is estimated to be at least 2.5% of GDP annually till 2030 to address the infrastructure gap caused by climate events.
• Public Sector Banks More Vulnerable: Public sector banks in India may be more vulnerable than private sector banks to climate-related financial risks.
• Policy Instruments to Influence Investment Decisions: Central banks have policy instruments to influence investment decisions and the allocation of resources and credit to achieve sustainability targets.
• Central Bank Regulations: Central banks could mandate banks and other financial institutions to consider climate and environmental risks through various regulations.
• Making the Net-Zero Goal By 2070 Attainable: A balanced policy intervention across all policy levers would enable India to achieve its green transition targets by 2030, making the net-zero goal by 2070 attainable.
• A Carbon Tax And An Emissions Trading System: The report recommends introducing a carbon tax and an emissions trading system linked to green taxonomy, as well as a green taxonomy in India to direct investment through better-designed policies and improve progress monitoring.
• Mine Rare Earth Elements: The report suggests ramping up domestic capacity to mine rare earth elements and produce critical equipment such as batteries and electrolysers, and investment in carbon capture and storage technologies.
• The Use of CBDC: The use of Central Bank Digital Currency (CBDC) or e-rupee can be more environment-friendly compared to other cashless methods, provided it is designed with Environmental, Social, and Governance (ESG) objectives in mind.