Within days of India signing the Paris Climate Treaty, Finance Minister Arun Jaitley on Friday said tax on environment unfriendly products will be ‘distinct’ from others in the forthcoming GST regime so as to boost funds for climate financing. “The indirect tax regime that we are planning, the rate of taxation on such products which are going to be environmentally unfriendly would be distinct from the normal rate of taxation. This is one of the proposals being discussed,” Jaitley said ahead of the two-day BRICS Summit beginning on Saturday.
The government is in the process of finalising rates for the Goods and Services Tax. The country has taxed coal and petroleum products in the past as well, Jaitley said, adding that “resources have to be mobilised from all sources for climate financing so that sustainable development goals can be achieved in a much more concrete manner”.
He said large commitment from the developed countries to provide funding for climate change financing is not sufficient to meet the sustainable development goals and that the multilateral agencies also need to chip in.
“Even now there is a debate as to nature of the USD 100 billion (that the developed world has committed for the developing nations), to fund technology transfers we do hope there is no double counting as far as the fund is concerned,” the minister added.
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The minister said, last year New Delhi and Beijing raised the issue of USD 100 billion because more than the value of the money, it was also about the trust.
Though a report indicated that most of the money was already paid there are various forms in which money is spent like healthcare, which can help environment, as the money is counted towards healthcare and also environment protection, the minister said.
Speaking on the issue, Reserve Bank Governor Urjit Patel raised concerns about countries undermining objectives like climate finance.
“The USD 100-billion number has been talked about for the past 10 years and there is very little pressure from the domestic constituencies in the advanced economy countries, including the media. This is part of a grand bargain and if you keep on undermining this, I think people will walk away from the table at some point,” Patel said.