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encouraging investment in joint venture projects abroad. The policy 3.2
is aimed at establishing a more efficient urea distribution and
movement system in order to ensure availability of urea in the
remotest corners of the country.
Micro, Small and Medium Enterprises (MSMEs)
Only about 7 per cent of all MSMEs have access to finance from
institutional/non-institutional sources, while close to 92 per cent
operate without access to finance/through self-financing. Over the
last decade, while the quantum of bank credit given to medium and
small enterprises by public sector banks has increased, the share of
credit to the MSE sector in Net Bank Credit (NBC) has declined from
12.5 per cent to 10.9 per cent and the share for the micro sector has
decreased by nearly 3 per cent (GoI 2010).
A number of initiatives to boost the MSME sector have been
taken up by government agencies as well as by the private sector.
An INR 50 billion (approx. USD 0.83 billion) India Opportunities
Venture Fund with the Small Industries Development Bank of
India (SIDBI) has been established with the aim of enhancing the
availability of equity to MSMEs, among other schemes supporting
technology upgradation by the government. The Twelfth Five-
Year Plan outlays three new schemes with an allocation of over
INR 75 billion (approx. USD 1.25 billion) that would infuse funds into
the sector through different paths which include equity financing to
supplement promoter contribution, venture capital funds to encourage
start-ups, and MSME exchange to facilitate equity access and
spread awareness.
The Working Group on MSME’s growth has also proposed a
budget allocation of INR 40 billion (approx. USD 0.67 billion) under
the Scheme for Technology Acquisition and Development in the TFYP
(Twelfth Five-Year Plan). Furthermore, the Group has recommended
systematically leveraging the National Clean Energy Fund to increase
the uptake of clean energy technology in the MSME sector. Besides this,
a fund of INR 3 billion (approx. USD 50 million) has been proposed for
technology collaboration and acquisition.
Technological modernization is the key to high industrial growth.
There are a large number of energy-intensive MSME clusters (around
178 clusters manufacturing about 15 product categories like castings,
forgings, glass and ceramics, food processing, textile processing, and so
on) in the country where energy efficient and cleaner technologies can
be facilitated. Yet, only a few programmes have targeted development
Chapter 2 Innovative Financing for Low Carbon Development 299
is aimed at establishing a more efficient urea distribution and
movement system in order to ensure availability of urea in the
remotest corners of the country.
Micro, Small and Medium Enterprises (MSMEs)
Only about 7 per cent of all MSMEs have access to finance from
institutional/non-institutional sources, while close to 92 per cent
operate without access to finance/through self-financing. Over the
last decade, while the quantum of bank credit given to medium and
small enterprises by public sector banks has increased, the share of
credit to the MSE sector in Net Bank Credit (NBC) has declined from
12.5 per cent to 10.9 per cent and the share for the micro sector has
decreased by nearly 3 per cent (GoI 2010).
A number of initiatives to boost the MSME sector have been
taken up by government agencies as well as by the private sector.
An INR 50 billion (approx. USD 0.83 billion) India Opportunities
Venture Fund with the Small Industries Development Bank of
India (SIDBI) has been established with the aim of enhancing the
availability of equity to MSMEs, among other schemes supporting
technology upgradation by the government. The Twelfth Five-
Year Plan outlays three new schemes with an allocation of over
INR 75 billion (approx. USD 1.25 billion) that would infuse funds into
the sector through different paths which include equity financing to
supplement promoter contribution, venture capital funds to encourage
start-ups, and MSME exchange to facilitate equity access and
spread awareness.
The Working Group on MSME’s growth has also proposed a
budget allocation of INR 40 billion (approx. USD 0.67 billion) under
the Scheme for Technology Acquisition and Development in the TFYP
(Twelfth Five-Year Plan). Furthermore, the Group has recommended
systematically leveraging the National Clean Energy Fund to increase
the uptake of clean energy technology in the MSME sector. Besides this,
a fund of INR 3 billion (approx. USD 50 million) has been proposed for
technology collaboration and acquisition.
Technological modernization is the key to high industrial growth.
There are a large number of energy-intensive MSME clusters (around
178 clusters manufacturing about 15 product categories like castings,
forgings, glass and ceramics, food processing, textile processing, and so
on) in the country where energy efficient and cleaner technologies can
be facilitated. Yet, only a few programmes have targeted development
Chapter 2 Innovative Financing for Low Carbon Development 299
