Government extends interest subvention for ethanol to grain-based units

NEW DELHI: The government on Wednesday approved interest subvention of Rs 4,573 crore to raise ethanol manufacturing capacity to 1,000 crore litres by including grain-based distilleries in addition to just molasses-based units.
The government aims to use the scheme to expand the feedstock for making ethanol to non-sugarcane farm produce such as cereals such as rice, wheat, barley, maize, corn and sorghum as well as sugar beet.
Oil minister Dharmendra Pradhan 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.
The expenditure on the scheme would be ₹8,470 crore, of which Rs 4,573 crore was approved by the Cabinet. The decision will fuel investment of Rs 40,120 crore in setting up new ethanol distilleries, boost local industries, generate jobs, give a fillip to the economy and encourage ‘urja-kheti (energy farming)’, which will transform our ‘annadatas (food providers)’ into ‘urjadatas (energy providers), a government statement said.
The government would bear interest subvention for five years including one year moratorium against the loan availed by project proponents from banks at 6% per annum or 50% of the rate of interest charged by banks, whichever is lower, the statement said.