Date : 26/08/2023

Relevance: GS Paper 3 - Sustainable Development

Keywords: Rural livelihoods, Sustainable development, Cleantech financing, Multi-actor partnerships, Cleantech Solution

Context-

• In his recent Independence Day address, Prime Minister Narendra Modi underscored India's determination to combat climate change while achieving significant development milestones.
• India's approach to climate action emphasizes alignment with developmental aspirations and economic growth, underpinning the notion that effective climate measures must be inclusive and transformative.
• The cleantech sector offers a promising trajectory that harmonizes environmental goals with developmental needs, presenting an opportunity to revolutionize youth employment, empower women, and enhance agricultural diversification.

Cleantech's Role in India's Green Economy

• Cleantech solutions stand as a beacon of hope, illuminating a pathway where developmental aspirations merge seamlessly with environmental objectives.
• For instance, the establishment of solar parks or electric vehicle charging stations contributes not only to climate action but also to the expansion of essential infrastructure in burgeoning economies. The resurrection of millets, often regarded as "nutri-cereals," not only enhances agricultural resilience but also augments farm incomes in rain-fed regions, a tangible example of the dual benefits intrinsic to the cleantech paradigm.
• Translating the cleantech ethos into tangible outcomes for the youth seeking employment, women striving for economic opportunities, and farmers yearning to diversify their income streams requires a concerted effort to integrate these solutions into the fabric of India's development landscape.

Cleantech Initiatives in Rural India

• Recent years have witnessed the proliferation of cleantech initiatives permeating the rural heartlands of India. These initiatives have harnessed the power of cleantech solutions to elevate livelihoods among rural populations.
• A diverse array of success stories dot the Indian hinterlands – from Andhra Pradesh's solar dryers converting surplus tomatoes into sun-dried treasures, to biomass-powered cold storages in Maharashtra propelling lemon farmers to earn three to five times their initial returns. Moreover, solar silk reeling machines in Odisha have alleviated thigh-reelers' toil while doubling their income. These examples represent a subset of over 50,000 instances where cleantech is catalyzing rural jobs and income generation.
• However, this quiet revolution requires a structural impetus to attain its full potential. The rural economy, housing 120 million farmers and 34 million microenterprises, grapples with unreliable electricity access and expensive diesel dependence. Cleantech solutions powered by renewable energy sources possess the transformative capacity to curtail diesel imports, curb food spoilage, enhance rural livelihoods, and concurrently present an investment avenue amounting to $50 billion.

The Numbers and Potential

• Intriguing research by the Council on Energy, Environment, and Water (CEEW) unveils that a mere twelve cleantech solutions, spanning solar pumps, cold storages, charkhas (spinning wheels), and looms, could potentially impact an impressive 37 million livelihoods.
• This translates to approximately 16% of India's rural populace. To propel this movement from tens of thousands to tens of millions, a three-pronged strategy is vital.

Leveraging Existing Government Initiatives

• The first facet revolves around harnessing existing government initiatives that foster livelihoods. Programs like the Pradhan Mantri MUDRA Yojana, offering collateral-free microenterprise loans, can facilitate the adoption of cleantech solutions.
• The Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PM-FME) scheme, aimed at advancing technology among micro food enterprises, can unlock support for solutions such as solar dryers, energy-efficient food processors, and solar grain mills. Other initiatives like the Pradhan Mantri Matsya Sampada Yojana can be harnessed to introduce solar refrigerators and dryers to fishing communities.
• Moreover, the Agriculture Infrastructure Fund, with significant untapped potential, could boost the adoption of biomass-powered cold storage systems and beyond.

Enabling Large-Scale Cleantech Financing

• The second aspect revolves around enabling substantial financial backing for cleantech solutions.
• This involves augmenting bankers' capacity for credit assessment, given the novel nature of cleantech solutions and their associated cash flows. Risk mitigation measures, such as partial guarantees, are essential in the nascent stages to bolster market confidence.
• Active collaboration with financiers is crucial to tailor loan products that align with users' cash flow scenarios. Notably, this approach has yielded substantial outcomes for 'Powering Livelihoods', an initiative by CEEW and Villgro, which secured over 300 loans for cleantech solutions in rural areas.

Creating a Comprehensive Ecosystem

• The third dimension underscores the importance of multi-actor partnerships spanning technology innovators, manufacturers, distributors, service providers, financiers, and market-linkage players.
• A holistic ecosystem is pivotal for the widespread adoption of cleantech solutions. Challenges faced by cleantech manufacturers include limited product awareness, high customer acquisition costs, and low customer density, necessitating localized touchpoints for users.
• Collaborative efforts between distributors and manufacturers can bridge these gaps, ensuring not only product accessibility but also after-sales support and market linkages.

Conclusion

India's ambitions for a clean and green future are formidable. By focusing on cleantech solutions to bolster livelihoods, especially in rural areas, India can achieve an inclusive green transformation. Cleantech's potential to simultaneously drive development and climate action is poised to revolutionize the landscape of rural India. Through strategic alignment with existing programs, comprehensive financing, and ecosystem creation, the nation can pave the way for a future where cleantech not only shapes rural livelihoods but also sustains a greener planet for generations to come.

Source -The Hindu