The Indian Biogas Association (IBA) announced Sunday that the proposed increase in financing for Micro, Small, and Medium Enterprises (MSMEs) in the General Budget 2025 is a positive step for the biogas industry, reports The Business Standard. The IBA stated that the budget, with its emphasis on manufacturing, green energy, and digital transformation, “lays the groundwork for a self-reliant and developed India.”
The IBA highlighted the increased MSME Credit Guarantee Scheme as particularly beneficial for the biogas industry, which often struggles to obtain credit with favourable terms. “By increasing the credit guarantee cover from Rs 5-10 crore, the scheme will make it easier to get loans without collateral, reducing financial obstacles for compressed biogas (CBG) developers,” the IBA explained.
The revised MSME classification criteria, which allow for significantly higher investment and turnover limits, will also benefit the biogas sector. “This change means that even larger CBG projects will now be eligible for these incentives,” the IBA noted.
While praising the budget’s support for MSMEs, the IBA suggested that specific policies for the CBG industry would have been even more helpful. The association has already asked the government to create a system that allows biogas plant operators to sell carbon credits both internationally and domestically. “This would improve financial viability and help achieve climate goals,” the IBA said.
The IBA also recommended policies that include funding for collecting agricultural waste, subsidized transportation costs, and expanding programs that discourage crop burning. “Incentives like a corporate tax holiday for CBG production would stimulate investment, which in turn would create jobs and promote cleaner energy,” the IBA added.
The association acknowledged that tax incentives might lead to short-term revenue loss, but emphasized the long-term benefits. “With approximately 100 commercial CBG plants projected to generate Rs 1,200 crore in the 2025 financial year, these steps will significantly improve sustainability, economic development, and India’s position in clean energy,” the IBA stated.
The IBA concluded that the budget is a consumption-driven plan that will boost the economy by increasing domestic demand, improving access to credit, and encouraging entrepreneurship.
