The trick to creating millions of jobs: Go green
Adoption of green technologies by industries will result in fast approval by the government and millions of new jobs can be created by switching from high-carbon economy to low-carbon. This will help in overcoming poverty and improved livelihoods.
Economic Times (ET): How do you see the state of affairs for sustainable manufacturing among Indian business players, especially MSMEs?
S P Sharma (SPS): A growing number of organizations have begun working towards implementation of Green Manufacturing (GM) because of heightened concerns around increase in pollution, depletion of natural resources and global warming. The emergence of new technology, digitalization, ZED scheme, innovative banking and energy-efficient production ensures a better future for our manufacturing sector. Businesses across all industries are incorporating sustainability into their business model, nurturing the development of sustainable manufacturing, which is the creation of manufactured products that use processes that minimize negative environmental impacts, conserve energy and natural resources. Many businesses have already started to take important steps towards green growth. However, many small and medium-sized businesses have not yet embraced these great opportunities. If nurtured well, MSMEs can bridge the gap and create one crore employment in the next 4-5 years.
ET: Do you believe going sustainable can help in employment generation? If yes, how can that happen and what is the scope of such a possibility in a rapidly industrialising economy such as India?
SPS: I do believe that going green will also lead to employment generation. Adoption of green technologies by the industries will result in easy and fast approval by the government and millions of new jobs can be created by switching from the high-carbon economy to low-carbon. This will further help in overcoming poverty and deliver improved livelihoods for the present as well as future generations. While growth is necessary for a rapidly industrializing economy, such as India, the country’s environmental concerns need to be mitigated. The manufacturing sector must use energy and resources efficiently and minimize the generation of waste. Green Manufacturing is thus the need of the hour and no more an empty slogan.
ET: If you were to name specific bottlenecks hurting the adoption of sustainable manufacturing by Indian manufacturers, what would those be?
SPS: There are certain barriers which hinder sustainable manufacturing by Indian manufacturers. Lack of awareness or information in terms of insufficient information about the available technology choices and limited access to green literature could probably be an obstacle. Technological risk of the immature and unproven technology also seems to be a hurdle in its way. Although the government is doing a lot to get rid of impediments in the way of green manufacturing, however, we have to go a long way for the speedy approvals of the environmental laws. The single window system must be opened in every state to boost the sustainable manufacturing process. Lack of proper organizational infrastructure, lack of trained human resources, cost of monitoring etc. are some other impediments hurting the adoption of sustainable manufacturing by Indian manufacturers.
ET: At a time when MSMEs are already reeling under a severe fund crunch, how can they even think about Sustainable Manufacturing? How can the governmentcreate financial elbow room for MSMEs to turn sustainable?
SPS: Several new technologies, methods and models need to be developed and sourced for adaptation across sectors and clusters of MSMEs. The government is doing a lot to support the MSMEs. To catalyze this sector, loans and funding are advanced to the NBFCs. Loans at a rate of 5% are provided to nurture the MSMEs. A small enterprise entangled with several operational and strategic issues with limited human resources needs integrated government support and development schemes of assistance and coordination of relevant stakeholders.
Information dissemination through organizing seminars, workshops, exposure visits, etc., financial support for studies and R&D, support implementation by providing direct or indirect financial or tangible support can help in creating financial elbow room for MSMEs to turn sustainable.
(SP Sharma, Chief Economist, PHDCCI)
ET: When it comes to following global benchmarks and standards prevalent in sustainable manufacturing, how is the level of adoption by Indian exporters?
SPS: Managing operations in an environmentally and socially responsible manner is no longer just nice-to-have, but it has become a business imperative. Companies across the world face increased costs in materials, energy, and compliance coupled with higher expectations of customers, investors and local communities. Similar is the case with Indian manufacturers. Effective use of materials is one possible component of a sustainable manufacturing strategy and the Indian exporting players have to stand ahead of the global players through an efficient means to foster green manufacturing. Waste minimization, material efficiency, resource efficiency and eco-efficiency are the key criteria to be focused.
The World Economic Forum (WEF) has ranked India at 30th position on a global manufacturing index, which is fair enough. India has room for improvement across the drivers of production. Human capital and sustainable resources are the two key challenges for India. The country needs to raise the capabilities of its relatively young and fast-growing labour force. However, there is a need to improve the stringent labour laws. Though the government is doing a lot, there is more scope in the form of introducing fixed-term laws of labour in different states.
ET: Global standards such as EP 100, Carbon neutrality, Carbon pricing, RE 100, Water footprint reductions, etc, all need tweaks in a business’s operational style along with investment. According to you, how much financial elbow room do India's energy-intensive industries really have?
SPS: India had realized the importance of energy rationing long back as a result of which the launch of the Environmental Conservation Act in 2001 was done. It has both the cause and the potential to adopt energy-efficient techniques. The major shortfall in the whole scenario is lack of funds and expertise in utilizing it. Use of energy-efficient technologies, optimal utilization of human resources, eco-friendly raw materials and biofuels will help in creating high potential markets for energy-efficient products in India. If the execution of existing policies is done correctly, India will be way ahead in terms of energy efficiency and sustainable manufacturing.
ET: In general, it's considered that the very idea of sustainable manufacturing is inversely proportional to the economic interests of enterprises. How do you see this notion and what could be the best approach to be adopted by a developing nation such as India?
SPS: It is right to say that economic interests and sustainable manufacturing are inversely related because businesses need to look after the production, consumption and revenue generation which involves the use of a blend of technology, natural resources and several other raw materials, which may or may not be eco-friendly. Cost minimization is what they focus upon, not waste minimization.
Minimization of environmental impact with manageable and measurable goals is very vital. Creating a clear path to sustainable manufacturing is critical to the long-term environmental, social, and financial health of any company. Hence, the industries must set meaningful and clear objectives and ensure that their products are eco-friendly and sustainable. Waste minimization, water conservation and use of renewable energy resources must be focused upon.