An autonomous research institute under the Ministry of Finance


COP27 and Public Expenditure for India’s First National Adaptation Communication

Publication date

Mar, 2023


NIPFP Working Paper No. 389


Lekha Chakraborty, Ajay Narayan Jha, Amandeep Kaur, Jitesh Yadav and Balamuraly B.


Against the backdrop of India’s commitment towards the COP27 in Egypt, we applied a multi-sectoral approach to Climate-Public Financial Management (PFM) to prepare the existing resources for India’s first National Adaptation Communication. Within the analytical matrices for identifying the financial resources for National Adaptation Communication (NAC), we have calculated the intensity of climate change components in the Demand for Grants by sectors - based on eight components incorporating crop improvement and research, drought proofing and flood control, forest conservation, poverty alleviation and livelihood preservation, rural education and infrastructure, health, risk financing and disaster management, for the period 2020-21 to 2022-23 for adaptation accountability in India. We found that more than forty sectoral ministries have adaptation related expenditure, accounting for around 5 per cent of GDP in India. This analysis based on an open-ended approach is mandated to identify the NAC baseline scenario estimates. The budget credibility analysis broadly revealed a perfect fiscal marksmanship with value 1 , with an exception of variations across a few sectors. Within the “fiscal rules”, an aggregate analysis of discretionary fiscal space plausible for adaptation available at the subnational level of governments is arrived at, with non-developmental spending crossing a threshold ratio of 40 percent in a few States.


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