The climate emergency is live. As smog, debris, heat and flood choke our lives and swiftly transforms into social media content on our phone screens, climate crisis is no longer confined to global conferences, or to the talk of environmental activists. Yet, the main tool for planning and organising our public resources to face this crisis, the Union Budget, has so far missed the scale of this problem. This is because the budgeting exercise fails to adequately grasp and respond to the overlapping nature of the climate crisis.Climate emergency is simultaneously also the crisis of labour and livelihood, health and agriculture and biodiversity, and a direct outcome of our industrial and infrastructural development. A climate sensitive budget should thus weave money and make plans for adaptation and resilience into several sectors and ministries.How climate has been pigeonholedThe Indian budget has tended to pigeonhole climate-related activities in government departments such as the Ministry Environment, Forests and Climate Change (MoEFCC) and the Ministry of New and Renewable Energy (MNRE). Some standalone climate initiatives are scattered across ministries, such as disaster management under the Ministry of Home Affairs, and energy conservation and development of battery storage under the Ministry of Power.The provisions made to MoEFCC are woefully inadequate to the task. In FY 2026, a mere 0.009% of GDP (Rs 3,413 crore) was allocated to it. The National Adaptation Plan (NAP), the policy response under MoEFCC targeted at reducing the vulnerability of communities, is solely expected from the global Green Climate Fund, sourced from contributions by developed countries, and had no budget allocated for in 2025. While the Rs 26,549 crore for the Ministry of New and Renewable Energy (MNRE) is important, investing in renewable energy without allocating resources for protecting the people against immediate effects of climate chaos creates an imbalance.The problem of mobilising resources for climate emergencies goes far beyond inadequate allocations for a few ministries.Climate lens imperative across ministriesClimate change is not an ‘environmental issue’ but a multiplier of risks across health, livelihoods, and the economy. According to the Germanwatch Climate Risk Index (CRI) 2026 report, in the last three decades, India suffered economic losses of a whopping USD 170 billion (inflation-adjusted) owing to climate extreme events. The brunt of such devastation is disproportionately borne by low-income and agrarian communities. With such serious catastrophic events, a climate-sensitive budget must be integrated in Demand for Grants of all key ministries. For instance, the National Action Plan on Climate Change and Human Health, under the Ministry of Health and Family Welfare (MoHFW), received zero allocation in 2025. This is untenable when in the last three decades, India witnessed more than 430 extreme climatic events, such as floods, heatwaves, cyclones and droughts, leading to over 80,000 deaths and impacting over 1.3 billion people. A climate lens would mandate funding for heat-stroke units, disease surveillance, and mental health services for climate-related mental trauma. Similarly, the Ministry of Labour and Employment (MoLE) excludes budgeting for the climate vulnerability of India’s vast informal workforce which is forced to work in intense heat, humidity and rain. Should not the budget account for their wage loss compensation during unbearable heat, invest in urban infrastructure that protects the working poor from climate extremes, and create space for climate risk insurance? Planning for such expenditure is not a welfare luxury, it is an essential adaptation to keep the economy functioning.Further, in the climate contingent agriculture sector, while several budgetary initiatives such as those on insurance, crop diversification, and agricultural infrastructure seem to address the climate challenge, the real world experience shows the insufficiency of such provisions. As Punjab reeled under devastating floods last year, suffering thousands of crores of agricultural losses, the union government had very little compensation to offer;.Integrating climate concerns in ministry-wise budget consultations shall go a long way in anticipating, preventing and addressing climate induced losses.Budgeting to leverage international financeThis internal budgetary shift is also crucial for India’s stance on international finance. While India justly advocates for Loss and Damage and adaptation funds in global forums, its credibility hinges on demonstrating domestic commitment. A climate-sensitive budget, with clear allocations for resilience, acts as a catalyst. It shows serious planning, builds administrative capacity, and creates the matching infrastructure needed to absorb and effectively deploy international climate finance. Without a robust domestic financial track record, our demands on the global stage lack leverage.Will big capital and rich polluters be taxed?The revenue side of the budget must evolve in alignment with the globally recognised principle of ‘common but differentiated responsibility’. Those who have polluted and continue to pollute more – big industries and corporations – should part with a significant share of their profits through taxation. We must think beyond decarbonisation, which focuses on reducing future greenhouse gas emissions, and towards ‘detoxification’ – a justice-centred paradigm that includes cleaning up existing pollution, restoring natural systems, actively removing historical carbon, and embracing environmental alternatives for the future. Revenue from climate-linked mechanisms should be pledged for a just transition, for compensating communities facing unavoidable losses, and for a holistic ecosystem restoration – our most potent natural shield.An urgent political imperativeThe Reserve Bank of India’s ‘Report on Currency and Finance 2022-23: Towards a Greener Cleaner India’ showed that the estimated cumulative total expenditure for adapting to climate change in India to be 85.6 lakh crore (at 2011-12 prices) by the year 2030. It further states that annually, an additional investment of about 2.5% of GDP would be required to replenish the adaptation infrastructure gap by 2030. The Economic Survey 2024-25 itself calls for a “multidimensional approach” with explicit policy measures and seamless integration of adaptation. Yet, commensurate attention and investment remain absent.Internationally, budgeting systems are evolving mechanisms to integrate climate needs holistically. With methods such as ‘climate tagging,’ which identifies climate relevant allocations in each ministry, resilience is sought to be weaved in public financial planning. Further, mechanisms for climate monitoring, auditing and target setting are taking shape at international fora and many countries. The financial need for adaptation and resilience building is the defining economic challenge of our time. Does the government care to listen? Vishvaja Sambath and Amitanshu Verma are associated with the Centre for Financial Accountability.