Background

India hosts the second largest base for MSMEs in the world after China. The Indian MSMEs sector contributes about 29% towards the GDP through its national and international trade and have stake of 45 percent of the manufacturing output and 40 percent of the exports.

MSMEs play key role in the value chain with the large industry and the sector also provide the largest share of employment after agriculture. As on 2019, the sector has been the source of income to 110 million employees (50 million are rural based). As an integral part of industrial sector, establishments are functional in cluster, and heterogeneous by nature with enterprise size and production scale. According to Ministry of MSME, there are about 6.3 Crore MSME units operational in India.

Due to wide variety of operating conditions such as seasonal, scale of operation and financial limitations, MSMEs prefer to adopt low-cost technologies and operating techniques. Majority of enterprises continue with existing process technologies and common appliances such as pumps, motors, etc with basic services to serve the purposes.

These practices lead the enterprise to depend on obsolete, low efficiency technologies that result in wasteful energy consumption and at the same time reducing profitability and competitiveness of MSMEs sector in India. The sector holds immense potential in fostering energy efficiency and upgradation of the technologies in routine processes.

In order to address the challenges and barriers for adoption of suitable energy efficient technologies, best practices, and energy efficient measures in the MSMEs, BEE has envisioned this novel scheme ‘National Programme on Energy Efficiency and Technology Upgradation in SMEs’