Ram Vilas Paswan urges States to encourage ethanol blending to facilitate liquidation of sugarcane dues

States urged to liberalize restrictions on ethanol supply

Shri Ram Vilas Paswan, Minster of Consumer Affairs, Food and Public Distribution has urged the States to liberlise restrictions on the supply of ethanol so that its blending with petrol can be encouraged to improve financial health of sugar sector and finally liquidation of cane dues of farmers.

In a communication to Chief Ministers of major sugarcane growing states, Shri Paswan has said in view of the challenges confronting the sugar sector and mounting arrears of cane dues owed to the farmers, the government of India, on its part, has taken several steps to restore financial health of sugar sector which include assistance as interest free loans for liquidation of cane dues besides incentive for export of raw sugar. Further in a major initiative, the Government of India has also modified the Ethanol Blending Policy (EBP) so as to facilitate achieving of 5% blend with petrol. Remunerative prices have been fixed to encourage the industry to supply ethanol to the Oil Marketing Companies (OMCs). The tendering process has been dismantled. However, it has been observed that the expected response to the new EBP has not been forthcoming. There are significant transaction barriers which impede smooth supplies of ethanol for blending. In several States, State not only imposes levy on molasses but also regulates the movement of non levy molasses. Inter-state movement of ethanol requires NOCs from the State Excise Authorities along with permits from dispatching and receiving States. Most States impose Export/Import duties on ethanol leaving and entering their boundaries. There are some instances where Octroi is levied on ethanol for entry into municipal limits.

Shri Paswan asserted the States would agree that such transactions barriers are impeding the successful implementation of EBP and adversely affecting the financial health of the sugar industry and the cane farmers. He urged the States to ensure that the barriers which are impeding the implementation of EBP are dismantled as the EBP can help industry to attain viability at a time of reportedly surplus of sugar and facilitate liquidation of cane dues arrears of farmers.

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