Union Budget 2021 expectations for green buildings: India is already the fourth largest market in the world for green buildings.
As the Finance Ministry prepares to announce the 2021 Union Budget in February, the landscape looks remarkably different from this time last year. In early 2020, India’s economic growth had slowed to the lowest point in a decade and experts were predicting major measures to revive the economy. Fast forward a few months, and the country was forced into lockdown to control the spread of the COVID-19 pandemic, dramatically shifting the strategies and outcomes for the year’s proposed plan. As we enter a second year marked by COVID-19’s shadow, the country’s needs have shifted. One key change is the increased importance of measures that protect public health. While there are many ways that India will need to address this, increased green building infrastructure and public policy could make enormous strides in achieving this goal.
Budget 2021 Expectations for green buildings and sustainable design
India is already the fourth largest market in the world for green buildings, and the reasons behind this demand are clear: through sustainable design, construction and operations, these structures are built to internationally recognized standards that reduce energy, waste, emissions, and water use, while prioritizing occupant health and wellness through safer building materials and air flow. In a country that already faces serious air pollution impacts – more than 1.2 million Indians died in 2017 alone from air pollution-induced complications – proven data that protects occupants is a serious draw that the government should be investing in as a foundational step to protect public health.
Additionally, real estate already contributes to an estimated 6-7 percent of India’s GDP and is a major driver of the country’s employment. As 2020 proved, many of India’s buildings were unprepared for a global health crisis, with poor air filtration, little daylight, and inefficient utilities that dramatically increased prices for residents forced to stay home during the lockdowns. We will need a shift in our building practices to improve existing structures to handle these challenges, and to prepare our cities, communities, and homes for future occurrences. In fact, with India’s population expected to reach 1.5 billion people by 2030, as much as 75 percent of all new construction will need to be residential in the coming years. The real estate and construction industries are only going to continue to grow. Now is the time to start implementing policy to ensure that those homes and buildings are green.
Budget 2021 expectations: Reduce carbon emissions and global emissions.
While the world continues to battle COVID-19, India is also working to achieve its Paris Climate Agreement goals. By 2030, India has committed to reduce its carbon emissions by almost three billion tons, and greenhouse gas emissions by 35%. While there have already been positive strides toward this goal, India still has a long way to go. Buildings create nearly 40% of all global emissions, making construction and real estate industries an ideal target to begin these reductions.
The Union Budget could spur the industry to aid this work through green incentives that require commitments from developers to abide by sustainable building standards, which in turn would stimulate the economy and build out healthier public spaces. Government funding for real estate and construction could prioritize new development that incorporates green features and builds to green standards.
Budget 2021 expectations: Dire need to incorporate green building practices
Additionally, India is already competitively placed to attract new investments in real estate sub-sectors, such as data centres, warehouses, and manufacturing facilities. As these types of projects tend to use more resources and emit more carbon than a typical building, there is a dire need to incorporate green building practices in the design stage and beyond to keep India’s emissions from growing exponentially alongside them. Government subsidies and policies could stem this tide and provide incentives to build sustainably from the beginning of a project’s life cycle.
Perhaps more importantly, large-scale infrastructure such as industrial parks and mixed-use developments provide an enormous opportunity to change the country’s conversations and comprehension about green building practices. Healthy buildings lead to healthy people, cities, and economies. Therefore, large-scale projects that impact entire communities should be targeted for government-subsidized green incentives which use these pillars as their fulcrum, simultaneously educating the public and working toward more efficient and sustainable spaces.
2020 was a difficult year, but we have the opportunity to utilize our hard-won wisdom and the new budget to pivot and creatively adjust our spending to create a healthier, safer country for its citizens.
The columnist is Managing Director, Southeast Asia and the Middle East, GBCI.