Climate risks and disasters are real and have become more severe and frequent. It necessitates that infrastructure development - a precondition to economic growth - is climate proofed and sustainable. States have a significant part to play in this endeavour as a large part of infrastructure is with states. While no state in India has carried out a comprehensive finance gap analysis, country level studies show a significant financing gap for the attainment of SDGs and Paris targets. Given the large financing gap and constrained government balance sheets, recalibration and augmentation of public and private capital at speed and scale will be a necessity. Many states are in the initial stages of understanding and responding to the financing challenge and opportunity presented by green and equitable transition. The growing sustainable finance market presents new opportunities, but to capitalise those opportunities, a bouquet of policy options would need to be exercised, regulatory environment needs to be bolstered, practicing change in fiscal management would be necessary and first principles for states would need to be articulated and implemented. Towards this endeavour the report is divided into five sections. The first section deals with finance gap analysis at the national level to establish the context, second section deals with emerging opportunities in the sustainable finance market, third section looks at how to expand the financial envelope through deployment of various innovative instruments, structures and institutions, and by collaborating with key national level institutions, the fourth section throws light on the need for Green Infrastructure plan at the state level and critical role of PSUs in green transition. The latter is explained through the example of energy sector. Finally, the last section is an articulation of the first principles and recommendations.