A study of India’s financial requirements and gaps by
Development Alternatives indicated that investment requirement for India
to meet it’s SDG goals till 2030 is USD 13.5 trillion, of which USD 1
trillion is apportioned to ensuring sustainable consumption and
production patterns. However the current gap in investment already
stands at USD 8.5 trillion.
Who Is Going To Be Paying For It?
As the conversation and the consensus moves from
billion to trillions of dollars of investment we need to answer the
‘Who’. The predecessors i.e. the MDGs when investments were beyond the
ability of the country, they were supported by development aid and debt
relief. This lead to a lot of aid flowing into the low income countries
especially on issues of health, sanitation, water, hunger and education
and raising their development standards. There are only 31 low income
countries in the world today.
As the lines between developed and developing
economies are blurring, the SDG negotiations also moved away from this
status quo as the focus and the financial burden shifts towards
developing countries and the private sector. Emerging consensus in civil
society is that mobilising domestic resources is a preferred source of
financing for development, one that is more stable and fosters
democratic ownership and accountability of the development process (Barder,
2015). The Overseas Development Institute analysis however does warn
against an overkill. Most low-income countries have little hope of
funding even the basic tenets of the SDG agenda such as social
protection, universal health coverage and education, even if revenue
collection improves. And in these sectors, the private sector is not
well-placed to fill the gap (Greenhill, 2015).
While not widely acclaimed as a success, some good
did come out of last month’s Addis Conference on Financing for
Development. The six major multilateral development banks and the
International Monetary Fund collectively pledged USD 400 billion in
loans and other assistance to help the world’s nations meet their
obligations under the new SDGs (Citiscope.org, 2015).
How Can We Pay For It?
Thus with limited ODA, the onus is on developing
countries to look at alternative investment opportunities. Middle-income
countries or emerging economies like India occupy a very interesting
space in the world today. They have moved from being recipients to
becoming providers of capital, technical assistance and foreign aid to
the rest of the developing world, while they are simultaneously home to
two-thirds of the world’s people living in absolute poverty. South-South
technology transfer between developing countries is an interesting
approach that can help nations meet their goals.
Goal 12 on Sustainable Consumption and Production
targets efficient use of natural resources and implementing the 10 Year
Framework Programme (10YFP), one of which is on Sustainable Buildings.
Sustainable buildings need sustainable resource efficient building
Development Alternatives with the assistance
(technical and financial) of the Swiss Development Cooperation (SDC)
adopted an old Chinese technology of brick firing called the Vertical
Shaft Brick Kiln (VSBK) to the Indian context in the 1990s. The VSBK is
one of the most efficient methods of firing bricks as it reduces fuel
consumption and hence carbon emissions by 40%, environmental emissions
by 80% and raw material wastage by 30% while providing a quality
building material. Post that TARA has been instrumental through a
South-South technology and knowledge exchange in transferring this
technology to Bangladesh, South Africa, Malawi, Nepal and Vietnam. Thus
this approach can help for example Malawi to meet its target for
sustainable consumption in the building sector.
There is also an increasing role played by the
private sector. Whether prompted by state failure or seeing the large
market there is to tap – in Prof. Prahlad’s words – at the bottom of the
pyramid, the private sector is increasingly moving into service
provision. Social enterprises in the space of health, education, water
and energy are mushrooming.
Goal 7 ensures access to affordable, reliable,
sustainable and modern energy for all. It targets that by 2030, there
will be universal access to affordable, reliable and modern energy
services and a substantial increase in the share of renewable energy in
the energy mix.
Smart Power India (SPI) has been created with an aim
to deliver support services to help scale and replicate sustainable
businesses that provide renewable energy to the underserved in rural
India. Funded by The Rockefeller Foundation, SPI will work closely with
energy service companies (ESCOs) to enable electrification of over 1000
villages. ESCOs will be bringing in private investment to the tune of
USD 50 million to build and operate the generation and distribution of
renewable energy to households and businesses. Though a small drop in
the ocean, such models can be replicated across the country to cater to
the 20,000 unelectrified villages in India.
Often the private sector cannot bear the entire
burden of investment. This is either due to large amounts of
infrastructure required or low perceived demand for essential services
such as waste management, conservation, affordable housing etc. thus
public-private partnerships are emerging as approaches of choice. The
public component comes generally in the form of incentives and ease of
access of operation (getting land, assured market), while the private
sector manages delivery of the service (capital and operational costs).
Goal 11 is to make cities and human settlements
inclusive, safe, resilient and sustainable. It targets by 2030, to
reduce the adverse per capita environmental impact of cities, including
by paying special attention to air quality and municipal and other waste
In collaboration with the Municipal Corporation of
Delhi, a pilot project was developed by IL&FS Environmental
Infrastructure & Services Ltd (IEISL) in 2010. This public private
partnership (PPP) has been initiated for 10 years to demonstrate the
potential of a scientifically managed process in relation to the
collection and recycling of C&D waste in Delhi. The C&D waste is
recycled into aggregates at the waste management facility, which is in
turn converted to Ready Mix Concrete (RMC), pavement blocks, kerbstones
and concrete bricks. This project demonstrates the viability of PPP
models in processing of C&D waste.
Another mode of investment, also alluded to above is
domestic resource mobilisation or taxation. OECD countries collect 34%
of their GDP as tax. Developing nations collect half this rate (DCR 91)
(Fishman, 2015). This of course is not without internal political
ramifications and therefore often not a tool of choice. A case in point
is the highly acclaimed city of Bogota, Columbia and it’s eccentric
mayor Anatanas Mockus. When the City Council turned down his request to
raise taxes to deal with the city’s expenses, he asked people to pay 10%
extra in voluntary taxes. About 63,000 people voluntarily paid the
Another interesting initiative that arose from July’s
Financing Conference was the Global Partnership for Sustainable
Development Data, launched with modest seed financing but could signal a
new approach to building new public accountability systems that track
resources to results. Such mechanisms will help build confidence of
various stakeholders who invest in the SDGs in terms of finances,
people, capacities, technology, knowledge and hope.
• Barder, O. (2015,
July). Retrieved from Addis: A Good First Step, but a Terrible Last
Word, for 2015.
(2015, July). Retrieved from
• Fishman. (2015,
February). Facts and Figures on Financing for Sustainable Development: A
brief compilation. Retrieved June 2015, from
• Greenhill, R. (2015,
July). Retrieved from From Addis to New York: What does the FFD summit
imply for the SDGs?
• Mcarthur, J. (2015,
July). The Brooklings Institute. Retrieved from Concepts and
• UNCTAD. (2014).
Investing in SDGs: An Action Plan for promoting private sector
contributions, Chapter 4. Retrieved June 2015, from http://unctad.org/en/PublicationChapters/wir2014ch4_en.pdf