A new analysis by climate justice advocate Soumya Dutta, published by the Centre for Financial Accountability (CFA), has raised urgent concerns over the growing disparity in India’s climate finance landscape. The report warns that private capital is overwhelmingly flowing toward commercially profitable mitigation projects, while the adaptation needs of the country’s most vulnerable populations remain critically underfunded.
In the article, "Climate Finance and India: Who Pays, Who Benefits, and Who Gets Left Behind?", Dutta highlights that while India’s tracked annual climate finance averaged ₹8.20 trillion (approximately US$100.4 billion) during FY2022–23 and FY2023–24, the distribution is heavily skewed. Of this total, ₹6.685 trillion was directed toward mitigation efforts, compared to a mere ₹1.510 trillion for adaptation.
Dutta points out that domestic sources account for 88% of tracked mitigation finance, with private actors contributing 68% of that domestic share. Sectors like renewable energy, electric mobility, and green hydrogen attract this private investment due to what Dutta describes as "relatively identifiable revenue streams through electricity sales and power-purchase agreements."
In stark contrast, domestic sources account for approximately 95% of India’s tracked adaptation finance, with private-sector contributions remaining "negligible." This is because vital adaptation interventions—such as drought-resilient agriculture, coastal protection, and heat-stress mitigation for informal workers—generate "enormous social and economic benefits but little direct commercial revenue," offering limited incentives for private investors.
Highlighting the human cost of this financial imbalance, Dutta writes:
"From a climate justice and just transition perspective, the distribution of climate finance matters as much as its overall volume. Financing a commercial solar power project and protecting small farmers against recurrent droughts may both constitute climate action, but their financial structures, beneficiaries and social purposes are fundamentally different."
The report identifies small and marginal farmers, fishers, coastal communities, construction labourers, street vendors, and Himalayan populations as those being systematically left behind. These groups face escalating threats from cyclones, heat stress, and glacial lake outburst floods, yet they are forced to rely on inadequate public resources while private capital flows elsewhere.
Furthermore, Dutta cautions against the increasing reliance on commercial or near-commercial loans for climate finance, emphasizing the principles of equity and historical responsibility. The article argues that vulnerable communities and financially constrained countries "should not be burdened with debt for protecting themselves against a crisis they contributed least to creating," and calls for substantial grant-based support for essential adaptation.
The article concludes with a stark warning about the true purpose of climate funding, urging a systemic shift in priorities:
"Ultimately, climate finance is not just about mobilising capital for a low-carbon economy. It is about determining whose lives, livelihoods and futures are protected in a dangerously warming world. If the transition finances profitable technologies while leaving the most vulnerable people and countries to cope with climate disasters largely on their own, it cannot be called just."
Dutta calls for a more transparent climate-finance accounting system in India and stresses that a "genuinely just climate-finance architecture must put people, livelihoods, ecological security and historical responsibility at its centre."
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