Cleantech, for an inclusive green future in India

Source– The post is based on the article “Cleantech, for an inclusive green future in India” published in “The Hindu” on 26th August 2023.

Syllabus: GS3- Environment

News– In his address to the nation on Independence Day this year, Prime Minister Narendra Modi talked about India showing the world how to combat climate change.

What is the concept of a green economy?

The concept of the green economy synchronises developmental progress with positive environmental results.

For example, the construction of a solar park or a station for charging electric vehicles contributes to the growth of essential infrastructure in an emerging economy. It also addresses climate change.

What are various cleantech initiatives in states to promote the green economy?

These efforts focus on providing access to clean technology solutions to support the livelihoods of the rural populace. For instance, in Andhra Pradesh, there are solar dryers that transform surplus tomatoes into sun-dried products.

In Maharashtra, biomass-powered cold storage facilities assist lemon farmers in achieving profits three to five times higher than the original prices.

What is the potential of cleatech for the Indian economy?

The rural economy of India consists of around 120 million farmers and 34 million microenterprises. It faces issues like unreliable access to electricity and a heavy reliance on costly imported diesel.

The clean technology solutions offer the potential to decrease India’s diesel imports, and prevent the spoilage of perishable food items.

It will improve opportunities for rural livelihoods. This presents an investment prospect valued at $50 billion for investors and financiers.

Research conducted by the CEEW indicates that merely 12 such clean technology solutions could potentially positively affect at least 37 million livelihoods, which corresponds to roughly 16% of the rural population.

What are various aspects of a comprehensive strategy to promote a green economy in India?

Leverage existing government programmes- The Pradhan Mantri MUDRA Yojana that extends collateral-free loans for microenterprises can be used to enable the adoption of cleantech solutions.

The Pradhan Mantri Formalisation of Micro food processing Enterprises can be used to unlock support for solutions such as a solar dryer, an energy-efficient multipurpose food processor or a solar grain mill.

The Agriculture Infrastructure Fund, which has only seen a 15% fund utilisation against a target of ₹1,00,000 crore, can support the adoption of biomass-powered cold storage and beyond.

Large-scale financing of cleantech solutions- It requires supporting bankers’ capacity on credit assessment for cleantech .

There is also a need to hedge their risks in the initial stages of the market through partial guarantees. Moreover, active engagement with financiers is important to structure loan products that are aligned with the cash flow scenarios of users.

Adopting some of these principles helped ‘Powering Livelihoods’, to unlock 300-plus loans for cleantech solutions to women, self help groups, farmer producer organisations and individual micro entrepreneurs in rural areas.

Multi-actor partnerships- Partnership between technology innovators, manufacturers, distributors and service providers, financiers, and market-linkage players to enable an overall ecosystem is required.

Cleantech manufacturers often need help bringing their products to customers. The challenges faced include low product awareness, high customer acquisition cost, and low density of customers for such products in a given area.

Users too struggle with limited after-sales service and market linkage of the final processed products.

There is a need for a holistic ecosystem where distributors work with manufacturers to enable technology access at the last mile, service providers ensure after-sales services, and market-linkage players enable the connection to the market.