This lecture is part of the 2016 ProSPER.Net Young Researchers’ School on sustainable energy for transforming lives: availability, accessibility, affordability

1. 1
Reducing Energy Intensity of the
Indian Economy
OFFICE OF DEVELOPMENT COMMISSIONER,
MICRO, SMALLAND MEDIUM ENTERPRISES,
MINISTRY OF MSME
Rakesh Kumar Choudhary,
Dy. Director

2. India – A Growing Economy
India is the largest democracy in the world with a
population of over 1.2 billion people.
The Indian economy is the tenth-largest in the world
with a median age of about 24 years.
India's GDP is expected to cross the US$ 5 trillion mark
by 2025 from the current level of US$ 2.1 trillion
(approx.)
India has established its leadership in IT and knowledge-
based industries globally and known as the talent
powerhouse for the world.
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3. 3
Post Liberalization, (Since 1991), The liberalization and
globalization have provided unprecedented opportunity
for the growth and expansion of the industry and the
manufacturing.
Growing economy particularly in the wake of new
Policy initiatives such as Make in India, Startup India etc
are bound to increase in the energy consumption in
general and electrical energy in particular can be
considered as the indicators of economic and social
development.
Contd…

4. 4
Can we always consider energy consumption is an
indicator for growth? Not Really. Energy Consumption
includes inefficiency !
Needs comparision vis-à-vis other economy by way of
some indicator and here Energy Intensity comes into picture.
What actually it is? How it compares?
Energy intensity is a measure of the energy efficiency of a
nation's economy. It is calculated as units of energy per unit
of GDP. High energy intensities indicate a high price or cost
of converting energy into GDP. Low energy
intensity indicates a lower price or cost of
converting energy into GDP.
Energy Intensity – What if ?

5. Definition of MSMEs
Manufacturing Enterprises:
Micro Enterprises - investment up to Rs.25 lakh
Small Enterprises - investment above Rs.25 lakh & up to Rs. 5 crore
Medium Enterprises - investment above Rs.5 crore & up to Rs.10
crore
Service Enterprises:
Micro Enterprises – investment up to Rs.10 lakh
Small Enterprises – investment above Rs.10 lakh & up to Rs. 2 crore
Medium Enterprises – investment above Rs.2 crore & up to Rs.5
crore
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6. MSMEs – An Overview
Contribute 40% total Manufacturing Output.
Account for 43% of Exports.
Contribute 8% to GDP (Manufacturing).
36 million MSMEs in the country.
Provide employment to 80 million persons.
Produce around 6000 products.
Labor to capital ratio in the MSME sector is much
higher than in the large industries.
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7. MSMEs – Energy Efficiency
 In MSMEs energy consumption cost is 20-40% of
total production cost, having huge energy saving
potential.
 A study by BEE projected total energy efficiency
market in India at Rs.74,603 Crore.
 The investment potential in SME sector alone is at
around Rs.12,100 Crore with 49 BU savings & 7000
MW of avoided capacity.
 The National Mission on Enhanced Energy Efficiency
(NMEEE’s) overall assessment also estimates avoided
capacity addition of 19,598 MW.
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8. 8
Hurdle and major barriers:
Obsolete technology and lack of access to modern
technology.
Lack of knowledge, financing and Inertia.
90% of units are proprietorship concerns, which are
limited on their managerial skills as well as amenability
to new ideas.
Perception of Energy efficiency measures are
financially unviable.

9. MSMEs – Energy Efficiency
 In the above back drop, Government of India has set
up a target of energy saving of 44.85 BU at consumer
side by the year 2016-17 of 12Th Five year Plan. This
is translating into 12,350 MW avoided capacity. In
addition, total thermal energy saving equivalent to
21.30 mtoe is targeted.
 As discussed above under the aegis of National
Mission for Enhanced Energy Efficiency, Ministry of
MSME has taken slew of initiatives to enhance energy
efficiency particularly in MSMEs.
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10. 10
Energy costs a significant proportion of the
manufacturing cost in most MSMEs, hence high priority.
There are various motivations to improve energy
efficiency.
Global climate change calls for a significant reduction
in emissions, which may contribute positively to the
strategy of wide scale deployment of innovative energy
efficient technologies.
Motivation – NMCP Programme - TEQUP
Contd…

11. National Manufacturing
Competitiveness Programme
(NMCP) for MSME Sector
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12. National Manufacturing Competitiveness Programme (NMCP)
S. No. Name of the Scheme
1 Application of Lean Manufacturing
2 Design Clinic Scheme
3 Technology & Quality Up gradation support for MSMEs (TEQUP)
4 Promotion of ICT in Manufacturing sector
5 Enabling Implementation of Quality Management Standards and Quality
Technology Tools (QMS/QTT) for SMEs
6 Marketing Assistance & Technology Upgradation for MSMEs (MATU)
7 National Campaign for awareness in Intellectual Property Rights (IPR)
8 Entrepreneurial & Management development of SMEs through Incubators
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13. Objective:
 Focuses on Energy Conservation, & Product Certification
Activities Proposed:
1) Awareness Generation for Energy Efficient Technology (GoI
Contribution - Rs.60,000/- (Cluster) & Rs.15,000/- (Association )
2) Credit Linked subsidy for EET Projects (25 %, Max. Rs.10 L)
3) Encourage MSMEs through subsidy to acquire National as well as
International Certification of Products
Technology and Quality Up gradation Support
(TEQUP)
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14. TEQUP
 Two important elements for enhancing
competitiveness –
Technology and Quality Up gradation

15. Goal / Objective :
Benefit to Micro, Small & Medium Enterprises
- Higher Energy Efficiency
– reduce the manufacturing cost
– Enhance Competitiveness
-

16. Technology and Quality Upgradation
Support to MSMEs
Approach :-
Sensitize the Manufacturing Sector in India to
the use of Energy Efficient technologies
(EET) and manufacturing Processes so as to
reduce cost of production and the emission of
Green house gasses (GHGs), by encouraging
MSMEs to adopt EET through Policy
intervention.

17. Scope of Work:-
 Capacity Building of MSME Clusters for Energy
Efficient Technology/Clean Development
Mechanism Interventions and other technologies
mandated as per the global standards –
 Organizing Awareness Programme in clusters and
Preparations of TSR/DPR.

18. Implementation:-
 Office of DC (MSME) - identify
MSME clusters for conducting the awareness
programme on EET, CDM etc. on the basis
of the responses received from the
- MSME-DIs,
- cluster based associations and NGOs,
- technical institutions.

19. CAPACITY BUILDING OF MSME CLUSTERS FOR
ENERGY EFFICIENCY / CLEAN DEVELOPMENT
INTERVENTION & OTHER TECHNOLOGIES
MANDATED AS PER THE GLOBAL STANDARDS
 Awareness Programmes on EET,
availability of EET Equipments and the
need for energy Efficiency and cash
benefits form EET & CDM.
 Financial Support 75% of actual
Expenditure (Rs. 75,000/- Max)

20. IMPLEMENTATION OF EET IN MSME
UNITS
 Loans from SIDBI / Banks / FI
 Subsidy up to 25% of cost of the project (Rs.
10 Lakhs Max)

21. SETTING UP OF CARBON CREDIT
AGGREGATION (CCA) CENTRE
 On Cluster Basis
 Financial Support 75 % of actual Expenditure (Rs. 15
Lakhs max per Center)

22. TO ACQUIRE PRODUCT
CERTIFICATION/ LICENSES
For Each MSME unit
For National Standards (BIS, BEE, Etc.,)
Financial Support 75 % of actual Expenditure
(Rs. 1.5 Lakhs Max per Unit)
For International Standards (CE, ANSI, UL,
Energy Star, Etc.,) Financial Support 75 % of actual
Expenditure (Rs. 2 Lakhs Max per Unit)

23. HOW TO APPLY
 Application Forms can be Downloaded
from the Website www.dcmsme.gov.in or
contact MSME-DIs
 Apply as per the guidelines provided
against each Activity in the Website

24. Other Initiatives
 Further to give a Philip and enhance the outreach a
new programme has been launched at a cost of
US$ 4 million in the name of ‘Clean Technology’
in partnership with United Nations Industrial
Development Organization (UNIDO), Global
Environmental Facility (GEF) and Federation of
Indian Chamber of Commerce and Industry
(FICCI) as implementing partner in execution.
The project would be funded by all the
stakeholders and co-financed by Government of
India.

25. Thank You
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