OIL & GAS

CCEA approves interest subvention for ethanol distilleries

The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a modified scheme for extending interest subvention to those setting up standalone ethanol distilleries.

A corpus of ₹4,573 crore has been sanctioned for increasing India’s ethanol production capacity, with the scheme extended to those setting up distilleries using grain, molasses, dual feed, sugar beet, sweet sorghum, cereals as a feed stock.

This assistance comes in the backdrop of ongoing farmer protests against recently passed farm laws.

“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 government said in a statement.

The government has been trying to connect with farmers, a major votebank, through various policy measures. With surplus sugar production depressing sugar price and increasing sugarcane farmer’s dues, the government has been pushing for ethanol production.

“There has been surplus production of sugar in the country since sugar season 2010-11 (except reduction due to drought in sugar season 2016-17); & sugar production is likely to remain surplus in the country in coming years due to introduction of improved varieties of sugarcane,” the statement said.

“In normal sugar season (October- September) about 320 Lakh Metric Tonnes (LMT) of sugar is produced whereas, our domestic consumption is about 260 LMT. This surplus sugar of 60 LMT in normal sugar season put pressure on domestic ex-mill prices of sugar.

Source
Livemint
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