The Indian Biogas Association (IBA) has welcomed the enhanced financing provisions for Micro, Small, and Medium Enterprises (MSMEs) announced in the General Budget 2025. The association believes these measures will drive the biogas sector’s growth and improve access to credit for Compressed Biogas (CBG) developers.
According to the IBA, the budget’s focus on manufacturing, green energy, and digital transformation aligns with the government’s vision of Aatmanirbhar Bharat and Viksit Bharat.
Credit Access Improvements for Biogas Projects
The expansion of the MSME Credit Guarantee Scheme was singled out as a major step forward for the biogas sector. Under the scheme, credit guarantee coverage has increased to ₹5-10 crore, enabling collateral-free loans for larger CBG projects.
Additionally, the revised MSME classification criteria, which allows for higher investment and turnover limits, will enable more large-capacity projects to qualify for incentives.
Policy Recommendations for the Biogas Industry
While praising these developments, the IBA has also proposed new policy measures to sustain and expand the sector’s growth. These include:
- A carbon credit trading framework to improve financial viability
- Funding for agricultural residue collection to support plant operations
- Subsidised transportation costs
- National expansion of anti-crop burning programs, modeled on initiatives in Haryana
The association has also called for corporate tax holidays to attract investment. The IBA projects that 100 commercial biogas plants could generate ₹1,200 crore in revenue in FY25.
Also read: Export Promotion Mission to Boost MSME Credit Access
Long-Term Benefits for Clean Energy Development
The IBA emphasized that while tax incentives might cause short-term revenue losses, the long-term gains include economic development, sustainability, and a stronger clean energy sector.
The association concluded that the Budget 2025 takes a consumption-driven approach, aiming to stimulate the economy by enhancing domestic demand, improving credit access, and fostering entrepreneurship. These measures are expected to significantly support the biogas sector’s contribution to India’s clean energy goals.