All 26 million MSMEs in India to adopt clean technology by 2025: Govt

by | Apr 21, 2016 | Industry

The Central Government has announced that all 26 million micro, small and medium enterprises in India would adopt clean technology measures by 2025. The Ministry of Micro, Small and Medium Enterprises made the ambitious announcement through an ebook launched on its website recently.

“We believe that solutions do exist and can be enacted with the right combination of political, social and financial will. Agencies, governments, investors and business need to proactively collaborate as forces facilitating this transition towards a sustainable energy future on a global level. Technology start-ups provide one of the most important vehicles to meet these challenges,” said Surendra Nath Tripathi, Additional Secretary and Development Commissioner, Ministry of MSME.

Many experts have welcomed the Government announcement against the background of climate change, global warming and the depletion of non-renewable resources such as petroleum and natural gas. They feel it is time for societies, governments and companies to come together and promote sustainable development before it is too late. They also say that climate change is not the only reason to invest in the transition to a clean energy future; India is also entering an era of resource scarcity of land, water and energy, given its burgeoning population.

But many have expressed their reservations too. They are skeptical of the implementation of the policy. They feel that the scale and magnitude of the task is daunting as the MSME sector is highly amorphous and widely diverse.

“Most of the sector is unorganized. It is also very diverse, ranging from services to manufacturing. A large portion of the sector still works with basic tools and is nowhere near the technology of the developed world. This is just a slogan and nothing else. This will not happen even in 2050,” said Satish Dhawan, who has a medium-sized enterprise of textiles.

However, the announcement is in tune with the global trends towards promoting green technology, particularly in the public sector. Last year, during 2015 United Nations Climate Change Conference, 20 countries, including India, the USA and China, launched an initiative “Mission Innovation” doubling their research and development budget on promoting clean energy to $20 billion, half of which is to come from the USA. Simultaneously, another initiative termed “Breakthrough Energy Coalition” was also launched by a group of 28 billionaire investors from 10 countries, including Bill Gates, Richard Branson and Mark Zuckerberg. The exclusive club is committed to funding clean energy companies and covering risks to allow early stage energy companies to come out of the lab and go to the marketplace. In the same vein, on March 10, 2016, the US government announced nearly $7 million of investments in 33 small businesses throughout the country to build strategic partnerships with national laboratories to expedite the development of clean energy technology.

“But given the scale of the challenge, we need to be exploring many different paths and that means we also need to invent new approaches. Private companies will ultimately develop these energy breakthroughs, but their work will rely on the kind of basic research that only governments can fund. Both have a role to play,” Microsoft founder Bill Gates had said at the setting up of the initiative.

Can the SME sector reinvent itself to be able to make the announcement a reality?

“For the success of the misson, the sector will have to be made aware of new and clean technologies. Some encouragement and incentivization will be needed to push the MSMEs to adopt such technologies,” said Shashank Dixit, CEO, Deskera, a leading enterprise providing business software in the Asia-Pacific region.

This is particularly true keeping in view that a movement similar to that in the West is yet to take off in India. Experts say this is happening due to the lack of commitment on the part of India Inc. as well as the high risk factor involved in such investments. They also point out that clean technology solutions are financially unviable and that to be successful they will have to be cost effective and made available at scale, so that they do not remain the fad of a few.

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