Decarbonisation of MSMEs in India
India’s micro, small and medium enterprises (MSMEs) are pivotal to its industrial landscape, contributing significantly to the GDP, employment, and exports. However, these enterprises are facing challenges in energy transition. To address this, the NITI Aayog recommends launching a scheme akin to PM-Suryaghar to provide capital subsidies for green energy and a viability gap-funding (VGF) scheme for energy-efficient solutions.
Importance of Energy Efficiency
- Energy Costs: Energy is one of the highest input costs for MSMEs, crucial for their business viability and growth.
- Export Market Impact: Decarbonisation is essential to adhere to international regulations and sustain in the trade sector.
About Proposed Scheme
- Emission Reduction Potential: Estimated reduction of 27-36 million tonnes over the implementation period.
- Viability Gap-Funding (VGF):
- Funds directly credited to OEMs to enhance energy efficiency technology uptake.
- Total VGF will not exceed 15% of project cost, estimated government expenditure around ₹6,000 crore.
- PM-Suryaghar-like Features:
- Capital subsidies for solar installations up to 3 kW capacity for micro enterprises, covering up to 800,000 units.
- Estimated total outlay of ₹28,672 crore over 20 years, with a capex of ₹21,109 crore.
Implementation and Financial Aspects
- Phase-1 Allocation: Initial allocation of ₹7000 crore recommended for the first phase.
- Target Clusters: Government will focus on 10 electricity-intensive clusters initially.
NITI Aayog Vice Chairman Suman Bery emphasized reconciling decarbonisation with competitiveness, noting India's high electricity charges compared to peers, critical for achieving manufacturing goals.
