Life Beyond PLI-Top 5 Green Schemes For MSMEs And Startups

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If you think the Government of India has been focused on large and utility-scale renewable projects, then you are right. The government focus has undoubtedly been on putting in place a large base, be it for solar capacity building or with schemes like the Production-Linked Incentive (PLI), domestic manufacturing that rewards scale. However, for smaller firms, all is not lost.

Multiple schemes sponsored by the Union government and in some states exist that seek to support the Micro, Small and Medium Enterprises (MSMEs) and startups to build green businesses or make their existing business greener. We pick a few of the most relevant ones here.

1. Green Credit Scheme:

The Ministry of Micro, Small and Medium Enterprises (MSME) launched the Green Credit Scheme to encourage eco-friendly and energy-efficient practices in MSMEs. Under this scheme, the Union government grants financial assistance and incentivizes companies for adopting environment-friendly technologies. The programme was introduced in the Green Budget too of the Indian government. 

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It has been designed to help mitigate climate change, build adaptive capacity and improve the overall state of the environment. Under the scheme, the government will incentivize companies, individuals and local bodies that adhere to sustainable practices under the Environment (Protection) Act and help mobilize additional resources for such activities.

2. Credit Linked Capital Subsidy Scheme (CLCSS):

Although not exclusively for green MSMEs, the Credit Linked Capital Subsidy Scheme (CLCSS) provides capital subsidies for technology upgradation in various sectors, including those related to environmental protection and energy efficiency. This targets small-scale industries, including agro and rural industrial units.

It provides a 15% upfront capital subsidy (limited to a maximum of Rs.15.00 lakhs). During 2018-19, a total of 14,155 MSE units have been assisted utilizing a subsidy of Rs. 980.44 crore.

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3. Technology and Quality Upgradation Support to MSMEs: 

This scheme aimed to enhance the competitiveness of MSMEs by supporting them in adopting cleaner and energy-efficient technologies. The scheme aims to undertake capacity building of MSME clusters for energy efficiency/clean development interventions and other technologies mandates as per global standards, setting up of carbon credit aggregation centres for introducing and popularising clean development mechanisms in the MSME sector. 

The Government of India will provide financial support to the extent of 25% of the project cost for the implementation of Energy Efficient Technologies (EET), as per the approved DPR. The maximum amount of GOI assistance from the scheme will be Rs.10 lakhs (The average subsidy for one EET project is estimated to be Rs. 5.0 lakh).

4. Environment Management Capacity Building (EMCB) Programme: 

This programme provides financial support to MSMEs for conducting environmental audits, adopting cleaner technologies, and implementing environmentally friendly practices.

5. Green Manufacturing Scheme: 

The government initiated the Green Manufacturing Scheme to encourage sustainable manufacturing practices among MSMEs by offering financial incentives for implementing green technologies and processes. It includes the transformation of the industries by using more green energy, more production and trade of green products and using green processes for operations. 

6. National Clean Energy Fund (NCEF):

While not exclusive to MSMEs, the NCEF supported renewable energy and clean technology projects that could indirectly benefit green-oriented MSMEs by creating a more sustainable energy landscape.

It was created as a dedicated corpus through the Finance Bill of 2010-11. It was financed by the cess on the produced call and the imported coals and aimed to promote clean energy initiatives. Several projects like Green India Mission, installation of solar lights, solar water pumps, solar plants and solar rooftops were financed with these funds.