Green Financing- A Study of Importance, Challenges and Opportunities in India

Abstract

Green financing has the following benefits for SD in India: it can boost renewable energy; it can support sustainable business practices; it can unlock private finance; it can create new employment; it can help to address climate change; and it can spawn innovative funding instruments. But there are certain issues that have to be addressed in order to achieve the optimum results of green finance in the Indian context. Some of these factors included ignorance by investors and financial institutions, limited access to finance, issues to do with regulation, absence of credit ratings on green bonds, high costs of transactions, and shortage of technology. In order to solve these issues as well as foster green finance development in India, major reforms by the government and financial institutions are needed. Some of these ways include: enhancing investors and other financial institutions’ awareness of green financing; offering guidelines and frameworks for green financing; creating public-private partnerships; and enhancing research on new opportunities for green financing in various sectors and different parts of India. In conclusion, it appears that India has a promising future in green finance because the country remains focused on practicing sustainable development and combating climate change.