Budget 2025 Fuels Biogas Sector With MSME Credit Support & Incentives: IBA

New Delhi, Feb 10 (KNN) The Indian Biogas Association (IBA) has expressed strong support for the increased financing provisions for Micro, Small and Medium Enterprises (MSMEs) outlined in the General Budget 2025, citing its potential to significantly boost the biogas sector's growth trajectory.

The budget's emphasis on manufacturing, green energy, and digital transformation aligns with the government's vision of Aatmanirbhar and Viksit Bharat, according to an official statement from the IBA. 

The association particularly highlighted the expansion of the MSME Credit Guarantee Scheme, which addresses a critical challenge faced by biogas and compressed biogas (CBG) producers in securing favorable credit terms.

The enhanced credit guarantee coverage, now ranging from Rs 5-10 crore, is expected to facilitate easier access to collateral-free loans for CBG developers. 

Furthermore, the revised MSME classification criteria, which permits 2-2.5 times higher investment and turnover limits compared to previous thresholds, extends eligibility for incentives to larger-capacity CBG projects.

While acknowledging these positive developments, the IBA has proposed additional policy measures to further strengthen the sector. 

The association has submitted recommendations to the government for developing a framework that would enable biogas plant operators to trade carbon credits both domestically and internationally, thereby enhancing their financial viability and supporting climate objectives.

The IBA's policy suggestions also include funding support for agricultural residue collection, subsidised transportation costs, and the nationwide expansion of anti-crop burning initiatives currently implemented in Haryana. 

The association advocates for corporate tax holidays to stimulate investment in CBG production, projecting that approximately 100 commercial plants could generate revenue of Rs 1,200 crore in FY25.

The association maintains that while tax incentives might result in short-term revenue losses, the long-term benefits would be substantial in terms of sustainability, economic development, and India's clean energy profile. 

The IBA concludes that the Budget 2025 represents a consumption-driven approach that effectively stimulates the economy by enhancing domestic demand, improving credit accessibility, and fostering entrepreneurship.

(KNN Bureau)