Context:

Union Minister Manohar Lal Khattar recently launched ADEETIE scheme to boost industrial energy efficiency among MSMEs.

About ADEETIE scheme:

ADEETIE stands for Assistance in Deploying Energy Efficient Technologies in Industries and Establishments.

·        It is a national initiative launched by the Ministry of Power to support Micro, Small, and Medium Enterprises (MSMEs) in adopting energy-efficient technologies.

·        The goal is to reduce energy consumption, lower carbon emissions, and improve competitiveness through sustainable practices.

Key features of the ADEETIE scheme:

• Budgetary outlay: ₹1,000 crore
• Interest subvention:
• 5% for Micro and Small Enterprises
• 3% for Medium Enterprises
• Technical & financial support:
• ₹875 crore for interest subvention
• ₹50 crore for energy audits
• ₹75 crore for implementation support
• Coverage: 14 energy-intensive sectors (e.g., textiles, steel re-rolling, food processing)

Implementation timeline and target reach of ADEETIE:

·         Implementation period: FY 2025-26 to FY 2027-28 (3 years)

·         Phased roll-out:

o    Phase 1: 60 industrial clusters

o    Phase 2: Additional 100 clusters

·         Targeted investments: ₹9,000 crore (including ₹6,750 crore of MSME lending)

·         The scheme aims to reach MSMEs across 14 sectors and 160 clusters, fostering a nationwide shift toward low-carbon industrial growth.

Impact:

·        Energy savings: The scheme is expected to help MSMEs reduce energy consumption by 30-50% and improve the power-to-product ratio.

·        Investment mobilization: The scheme is expected to mobilize Rs 9,000 crore in investments, including Rs 6,750 crore of prospective lending from MSMEs.

·        Low-carbon economy: The scheme will support India's transition to a low-carbon economy by enabling MSMEs to upgrade to energy-efficient technologies.

About MSMEs:

India’s micro, small, and medium enterprises (MSMEs) sector is a critical pillar of the economy.

Contributing 30% to GDP, employing over 100 million people, and accounting for 49% of exports, MSMEs have a larger economic footprint than entire nations like Thailand or Sweden. Throughout the country, it has around 63.4 million units.

Conclusion:

The ADEETIE scheme has the potential to transform the MSME sector by promoting energy efficiency and sustainability. With the right mix of incentives and support mechanisms, MSMEs can become globally competitive while reducing their environmental footprint.