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NITI Aayog suggests tax sops, viability gap funding for eco-labelled products

NITI Aayog, the Centre’s premier think tank, has mooted incentives and viability gap funding for eco-labelled products as part of the government’s green procurement policies to substantially improve resource efficiency in the country.

Resource efficiency or resource productivity is the ratio between a given benefit or result and the natural resource required for it.

“Incentives should be provided through tax benefits for eco-labelled products to encourage consumers to purchase such products,” the Aayog has said in a strategy paper on resource efficiency prepared under the supervision of its principal advisor Ratan P Watal. “A comprehensive and well-designed green procurement policy(GPP) can be a key instrument to promote resource efficiency in the economy.”

The Aayog has sought suggestions on the policy paper, following which it will finalise the green procurement policy.

As part of the action plan to achieve resource efficiency, the Aayog has laid out a detailed short-term and medium-term action plan spread over the next five years. “Set up an inter-departmental committee, assisted by task force of experts, to guide policy and programme actions by August 2017. Prepare a pilot project to showcase the development of indictors, data and analysis,” the policy paper suggested by way of short-term measures.

For the medium-term, the Aayog has laid emphasis on promotion, regulation and institutional development as the key areas to work upon.

“Focusing on designing cross-cutting policy instruments such as sustainable public procurement, standards, eco-labelling and certification for promoting resource efficiency in the use of critical materials in the hotspot sectors (key industrial and strategic sectors) of the economy is the key,” the policy paper said.

It further said, “Establishing an enabling setting for viability gap funding for RE interventions in a competitive manner with an objective to encourage players to come to the market, build up scale, upgrade technology, and enabling competition in the longer run is therefore an essential step.”

Laying the roadmap for achieving resource efficiency, the Aayog has proposed that a start be made with a small range of products, for which the market is already reasonably well-established, followed by a gradual expansion as the programme matures.

There is a global commitment to achieving resource efficiency in order to establish sustainable consumption and production patterns. It is also a priority for the government and is reflected in various policies and programme announcements such as Make in India, Zero Effect-Zero Defect Scheme, Smart Cities, Swachh Bharat and Ganga Rejuvenation Mission.

India is rich in primary materials. Currently, about 97% of all materials, including all abiotic and non-renewable materials
 consumed in the country, are extracted domestically. The extraction of primary raw materials increased about 420% between 1970 and 2010, lower than the Asian average but higher than the global average.

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