An India Advisory Council of the UNEP India Inquiry was convened by the Federation of Indian Chambers of Commerce and Industry (FICCI). This report, Delivering a Sustainable Financial System in India highlights key proposals emerging from their discussions for aligning the Indian financial system with sustainability.
In the Indian context, they call for the development of a more robust and resilient ‘sustainability-oriented market framework’ focused on banking, institutional investment, public finance institutions and foreign direct investment. They called for policy and regulatory innovation in five areas:
- Development of incentives such as equity tax credit and production tax credits.
- Strengthening existing institution such as Indian Renewable Energy Development Agency to become the green development financing institution.
- Deregulation to increase external commercial borrowing funding of green projects by exempting withholding tax, replacement of construction finance and refinancing and innovative solutions for hedging.
- Inclusion of renewable energy sector within the Priority Sector Lending (PSL) category requirements.
- Sharpening of the operation of the National Clean Energy Fund
They also called for key areas of market innovation in terms of green credit ratings, green bonds and yieldCos.
This publication is part of the GEF Aligning Finance Policies project.