Green Finance: A Pathway to Sustainable Economic Growth in India

Abstract

Green finance has become an essential mechanism for promoting sustainable economic progress in India by incorporating Environmental, Social, and Governance (ESG) elements into financial decisions. This study discusses the conceptual base of green finance and its contribution to sustainable development. It reviews major green financial instruments such as green bonds, eco-friendly banking initiatives, and climate-oriented investment avenues that support India’s movement toward a low-carbon and environmentally responsible economy. The paper also outlines existing regulatory policies, government initiatives, and the major issues experienced in applying green finance practices in the Indian context. Using a conceptual methodology grounded in stakeholder theory and institutional theory, the research evaluates how green finance influences economic development, environmental protection, and the stability of the financial system. The results indicate that although green finance activities are expanding in India, stronger policy coordination, financial support mechanisms, and active involvement of stakeholders are still necessary to fulfil long-term sustainability objectives.