The Brihanmumbai Municipal Corporation (BMC) recently launched Mumbai’s first-ever climate budget, making it the first city in India and the fourth in the world (after Oslo, New York and London) to launch a climate budget. While Mumbai works to expand and institutionalize their Environment and Climate Change Department, the Government of Maharashtra (GoM) institutionalized their State Climate Action Cell in 2023 and currently works to revise its State Action Plan for Climate Change. WRI India supports the GoM and the BMC as a knowledge partner to further their climate goals.

Home to Mumbai, Maharashtra is the third-most vulnerable state to hydrological and meteorological (hydro-met) disasters in India. Over the course of two short months, June and July 2024, Mumbai issued multiple heat wave warnings, witnessed a devastating storm and undertook pre-monsoon preparations. While mitigation measures are under consideration to reduce greenhouse gas emissions, the GoM and BMC are also taking steps to build climate adaptation and resilience at the state and city levels.

Assessing Maharashtra and Mumbai’s Climate Spending

Financial flow towards climate adaptation in India shows that the majority of funding comes from domestic sources. Central and state government budgets play a significant role in enabling mitigation across sectors like transportation and energy, while city and municipal budgets provide deeper insight into on-the-ground projects and activities – including allocations for urban services that help residents cope with the impacts of climate change. Understanding how governments allocate money on climate action, especially at the subnational level, is essential to help states and urban local bodies (ULBs) achieve their climate goals.

At the city-level, in Mumbai, WRI India experts have performed annual climate budget assessments since 2020 to make a case for more proactive climate budgeting, nudging the city to move beyond assessment, and supporting Mumbai’s city departments to include activities from the city’s climate action plan in their department’s budget proposals for this fiscal year.

At the state-level, in Maharashtra, WRI India adopted a slightly different approach. Experts utilized the UN Development Programme’s (UNDP’s) Climate Public Expenditure and Institutional Review methodology to analyze the state budget from a climate lens. This methodology gives weighted scores (high, medium, low or marginal relevance) to budgetary allocations based on climate relevance. Additionally, this methodology employs climate budget tagging: a tool that helps governments track and monitor climate-relevant expenditures in their budgets.

With these details and context in mind, WRI India assessed government allocations on non-salary, revenue and capital expenditures for Maharashtra’s fiscal year 2023-24 budget and for Mumbai’s climate budget for fiscal year 2024-25. Here’s what they found:

Maharashtra’s State Climate Budget for Fiscal Year 2023-24

For the 14 state departments assessed in Maharashtra, 9% of the state’s total revenue and capital expenditure budget is highly climate relevant, with a primary focus on improving climate resilience and mitigation. Of Maharashtra’s total state budget, 5% is allocated for adaptation and 2% each for resilience and mitigation. This high climate-relevant expenditure is part of schemes implemented by Maharashtra’s departments of urban development, revenue and forest, rural development, water supply and sanitation, agriculture, animal husbandry, fisheries, industry, energy and labor.

Mumbai’s Climate Budget for Fiscal Year 2024-25

In Mumbai, 20 departments were involved in the climate budget process. Of the BMC’s total capital expenditure budget for fiscal year 2024-25, 32.18% is estimated to be climate relevant. An additional 6.81% is allocated towards activities that integrate some components of the Mumbai Climate Action Plan (MCAP), such as the installation of LED lighting, rooftop solar panels and sewage treatment plants, in addition to the inclusion of greening and landscaping in BMC’s new construction projects. An estimated 19% of the total capital expenditure budget is allocated for mitigation-focused activities, 6% for adaptation-focused activities and 7% for resilience-focused activities. The departments housing the Mumbai Sewage Disposal project, Storm Water Drains and Water Supply projects receive the highest climate-relevant allocation for activities such as wastewater management, management of flood hotspots, and creation and maintenance of sewage treatment facilities, water treatment and desalination plants.

In addition to Mumbai’s own climate budget, Maharashtra’s state budget designates funds for city-level activities. Out of Maharashtra’s urban development department’s total capital and revenue expenditure budget for fiscal year 2023-24, 16% is estimated to be highly climate relevant. Of this 16%, a majority of the allocations – 38% and 40% respectively – are for AMRUT 2.0 and Swachh Bharat Mission, which focus on clean sanitation and solid waste management. Allocations for stormwater drainage accounted for another 19%, while transport received only 3%. Within the 3% allocated for transport, the focus on a just and inclusive transition is often overlooked when planning new transport policies and projects, with less than 0.5% allocated towards gender-related schemes like the Tejaswini Ladies Bus Service Scheme. Similarly, the lowest climate-relevant allocation at the city level was observed within the transport, education, disaster management, roads and traffic, and development planning departments. Allocations for sustainable transport, disaster preparedness and urban greening initiatives are negligible at both the state and city levels.

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Greater coordination between the budgetary processes of the city and the state can help identify underfunded urban climate activities. Climate budget tagging and assessment, like in the case of Maharashtra and Mumbai, can help subnational governments institutionalize planning and implementation of climate action. Furthermore, it can enable more proactive climate budgeting, ensure climate-aligned implementation of the bureaucracy’s existing priorities, monitor progress towards their climate goals, identify funding gaps and potentially help bridge those gaps through external financing mechanisms. Well-integrated climate budgeting processes at the subnational level can help increase investment and create greater impact on urban climate action.

A version of this article originally appeared on WRI-India.org.

Avni Agarwal is Urban Development Manager for WRI India.

Faiza Solanki is Senior Climate Program Associate for WRI India.

Pranav Garimella is Climate Program Manager for WRI India.