India’s MSMEs have generated 120 million jobs across various industries in India. Micro and small enterprises significantly impact the economy, contributing 33% to India’s GDP. While medium-sized enterprises make up just 1% of MSMEs, micro firms account for approximately 4.5%, and micro and small enterprises together represent over 90% of the sector. With industrialisation, it is important to implement production and operational activities in order to develop and grow sustainably. Among 64 million MSMEs, about 40 million are registered under MSME, out of which women-owned MSMEs contribute 18.73% to employment.
The MSME sector consumes energy equivalent to about 50 million tons of oil annually. As a major consumer of energy, they need to take measures to produce efficiently and use clean energy. This can be done by adapting to eco-friendly technologies which helps in contribution to achieve a sustainable environment.
The Government of India is promoting MSME to adopt renewable energy across all sectors. There are various schemes and programmes to create awareness to the MSME entrepreneurs of India. Some of the methods can be implemented are listed below:
By using solar energy MSMEs can increase their score on ZED as it reduces the carbon emissions and can be used to avail government grants and subsidies. By installing solar rooftops, it reduces the electricity bill and also cuts down overall costs. One of the major advantages is that it offers continuous access to electricity unlike the traditional source of using coal-generated power. By showcasing that the company is promoting a green environment it will help attract investors and customers, increasing the branding of the company.
The Government of India has taken initiative to advocate various schemes and policies for the MSMEs to adopt new and green technologies. Schemes such as Technology Upgradation and Quality Certification ZED Certification scheme, A Scheme for Promoting Innovation, Rural Industries and Entrepreneurship (ASPIRE), Credit Linked Capital Subsidy for Technology Upgradation (CLCSS) and Design Clinic for Design Expertise to MSMEs among various other schemes. The benefits for these schemes mainly involve adapting to new technology and upgrading the current manufacturing process to have an end result with improved efficiency, better quality of products, reduce rejection and reduce production in cycle-time and promote the use of green energy.
These devices enable energy from renewable energy which can be stored in them when necessary. This method helps in accessing sufficient energy as per necessity. This will also help in being self-sufficient without being dependent on external sources for electricity. These systems also reduce greenhouse emissions and minimise pollution.
The BBE is an agency of the Government of India under the Ministry of Power. The objective of this agency is to develop programs which increase the conservation and efficiency use of energy. Some of the schemes under this agency which are provided by the government include the BEE-SME scheme that is part of the National Programs on energy efficiency and technology upgradation of SMEs. GEF-UNIDO BEE scheme is promoting energy and renewable energy in selected MSME clusters in India and the scheme is financing energy efficiency product implementations in several MSMEs around the country. All these schemes mainly create awareness and encourage MSMEs to adapt and achieve sustainable development by adopting green energy.
Is also known as Indian Renewable Energy Development Agency which aims to address the effects of climate change and pollution reduction by financing and supporting renewable energy projects. They recently announced funding more loans for MSME to increase participation in the green energy sector. With the target to achieve 50% share of energy from fossil fuels and also 500 GW of renewable energy capacity by 2030, it is important for MSMEs to show considerable participation. As per the recent report, IREDA has gained 30%, crossing INR 383 by this quarter’s June.
Public awareness of renewable energy has been growing rapidly hence, it is important for MSME entrepreneurs to integrate sustainability principles into their business strategy. This not only has an impact in creating a green environment but also is an added advantage over the competitors that the enterprise is promoting a sustainable environment. Thus, helping MSMEs grow their business exponentially and increase their sales.
For any MSME a major barrier is the process of availing a loan with a reasonable interest rate and collateral. Kinara Capital is an RBI registered Systemically Important NBFC in India, offering a wide range of MSME loans with flexible interest rates without any property collateral. Check your loan eligibility within a minute on the myKinara app by providing minimum documentation. Offering services at your doorstep in vernacular go from decision to disbursement within 24 hours.
Various government programs and subsidies offer financial incentives for MSMEs to adopt sustainable practices. Amit Sharma, General Partner at Cactus Venture Partners, highlights that these incentives, such as subsidies for solar power, electric vehicles, and other green energy initiatives, are often industry-specific. Both central and state governments offer such incentives to encourage environmentally responsible practices.
Sharma emphasises that while subsidies are effective in the short term, long-term sustainability adoption should be economically viable with healthy returns on investment (ROI). The focus should be on making resources, technology, and tools more affordable and investing in innovative MSMEs that can develop cost-effective, sustainable practices.
For example, the Indian government offers the Technology and Quality Upgradation Support to MSMEs (TEQUP) scheme, which provides capital subsidies for adopting energy-efficient technologies. The Small Industries Development Bank of India (SIDBI) offers the Sustainable Finance Scheme, providing loans at concessional rates for green projects.
Despite these programs, only about 5% of Indian MSMEs utilise these financial incentives. Therefore, increasing awareness and simplifying the application process for these schemes could significantly boost participation and promote widespread adoption of sustainable and environmentally responsible practices among MSMEs.
India’s MSME sector, with over 64 million businesses, employs people and contributes to one-third of the country’s GDP. To enhance sustainability, MSMEs should adopt eco-friendly technologies and leverage government schemes promoting green energy. Methods like installing solar rooftops and using renewable energy storage can help. Embracing sustainable practices benefits the environment and offers a competitive edge and long-term growth for MSMEs.
For any MSME a major barrier is the process of availing a loan with a reasonable interest rate and collateral. Kinara Capital is an RBI-registered Systemically Important NBFC in India, offering a wide range of MSME loans with flexible interest rates without any property collateral. Check your loan eligibility within a minute on the myKinara app by providing minimum documentation. Offering services at your doorstep in vernacular go from decision to disbursement within 24-hours.
1 What is the sustainable development of green energy?
Sustainable development of green energy involves producing energy from renewable sources in a way that meets current needs without compromising future generations’ ability to meet theirs.
2. What is the role of MSMEs in achieving sustainable development goals?
MSMEs play a crucial role in achieving sustainable development goals by adopting eco-friendly practices, innovating in green technologies, and creating jobs that support sustainable economic growth.
3. What role do regulations play in sustainable development for MSMEs?
Regulations guide MSMEs towards sustainable practices by setting standards, providing incentives, and ensuring compliance with environmental and social norms.
4. How can MSMEs measure their sustainability performance?
They can use metrics like carbon footprint, energy efficiency, waste management, and adherence to sustainability standards and certifications.
5. Why should MSMEs in the green energy sector focus on sustainability?
MSMEs in the green energy sector should focus on sustainability to ensure long-term viability, attract eco-conscious customers and investors, and contribute to global environmental goals.
