By Pallavee Dhaundiyal Panthry
As the 2024 Union Budget approaches, the sustainability and climate solutions industry stands at a critical juncture. The upcoming budget presents an opportunity for the government to demonstrate its commitment to sustainable growth by providing much-needed support to the industry, particularly small and medium enterprises (SMEs) that form its backbone. Industry leaders and stakeholders are keenly awaiting policy measures that will drive innovation, competitiveness, and environmental responsibility.
The sustainability sector faces substantial challenges, including financial constraints and resource scarcity. These issues are particularly acute for SMEs, which constitute a significant portion of the industry’s clientele. Many SMEs hesitate to adopt sustainability solutions due to the lack of government incentives and support structures. To overcome these hurdles and ensure a seamless integration of sustainable practices, government intervention is crucial.
Implementing input tax credits for the use of green fuel in manufacturing processes could significantly reduce operational costs and encourage the adoption of eco-friendly practices. Additionally, providing subsidized loans for investments in green technologies would lower the financial barriers for SMEs, enabling them to modernize and reduce their environmental footprint. Seamless technology integration is also vital. Offering incentives for SMEs to adopt digital solutions for ESG metric reporting will streamline compliance and foster a culture of sustainability.
Moreover, granting direct tax concessions to businesses that comply with ESG (Environmental, Social, and Governance) and BRSR (Business Responsibility and Sustainability Reporting) standards will reward and encourage responsible business practices. Direct tax incentives for companies that promote decarbonization tools and digital technologies will ensure reliable carbon data and support emission reduction efforts.
Expanding Production Linked Incentive (PLI) schemes, promoting the electric vehicle (EV) sector, introducing green taxation policies, and streamlining GST rates and compliances are also critical measures. The introduction of a carbon tax on high-emission industries would encourage the adoption of greener technologies and generate revenue for sustainable projects. These initiatives would position India as a leader in sustainable development, aligning with global efforts to combat climate change.
Furthermore, solutions are needed to help companies navigate their decarbonization and sustainability journey effectively. This includes support for compliance with increasing domestic and global standards, ensuring that businesses can transition smoothly towards a more sustainable future. The government must invite support from companies that offer comprehensive sustainability solutions to those seeking help. Both providers and recipients of such support should be incentivized, particularly when tangible results are demonstrated. A comprehensive approach that combines financial incentives, regulatory support, and technological innovation is essential for driving the industry’s growth and achieving national sustainability goals.
About WOCE: The World of Circular Economy (WOCE) is a global industry player dedicated to providing comprehensive sustainability solutions. Its mission is to empower organizations with innovative tools and strategies to achieve their sustainability goals. Its latest AI-powered platform, esgpro.ai, is designed to assist companies in their ESG reporting and compliance efforts, helping them meet stringent sustainability standards and drive their decarbonization efforts.
(The author Pallavee Dhaundiyal Panthry is Chief Communication Advisor- Sustainability, at World of Circular Economy (WOCE), and the views expressed in this article are her own)
