The Union Cabinet on Wednesday approved a modified scheme for interest subvention for ethanol production, expanding the scheme to include grain-based distilleries and not just molasses-based ones.
Petroleum and Natural Gas Minister Dharmendra Pradhan said the decision would encourage ethanol production from grains like barley, maize, corn and rice. The expenditure on the scheme would be ₹8,470 crore, of which ₹4,573 crore was approved on Wednesday, he said. He said the scheme would boost production and distillation capacity to 1,000 crore litres and help in meeting the goal of 20% ethanol blending with petrol by 2030.
In a statement, the government said: “The proposed intervention would enhance production of 1G [first generation] ethanol from various feed stocks. It helps in achieving blending targets of ethanol with petrol and would promote ethanol as a fuel which is indigenous, non-polluting and virtually inexhaustible. It would improve the environment and the eco-system and result in savings on Oil Import Bill. It will also ensure timely payment of dues to farmers.”
The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi , approved the extension of interest subvention to those grain-based distilleries that use dry milling process and new molasses-based distilleries that install any method approved by the Central Pollution Control Board.
“The government would bear interest subvention for five years including one year moratorium against the loan availed by project proponents from banks @ 6% per annum or 50% of the rate of interest charged by banks whichever is lower,” the statement said.
