New Delhi, February 20:
With fears of sugarcane arrears crossing Rs.13,000 crore next month, Food Minister Ram Vilas Paswan today urged State governments to ease curbs on the supply of ethanol for blending with petrol.
The Minister’s statement came a day after the Cabinet approved export incentives of Rs.4,000-a-tonne for 1.4 million tonnes of raw sugar. Paswan stated that he believed that such a step would help the cash-starved mills in clearing pending payments to farmers.
EBP modification
“The government modified the Ethanol Blending Programme (EBP) to facilitate achieving a 5-per-cent blend with petrol. Remunerative prices have been fixed…the tendering process has been dismantled. However, it has been observed that the expected response to the new EBP has not been forthcoming,” Paswan wrote to Chief Ministers of major sugarcane growing States.
Levies imposed
An official statement quoted him noting that “significant transaction barriers” were impeding smooth ethanol supply.
He also added that successful implementation of the EBP which “can help industry attain viability at a time reportedly of surplus sugar and facilitate liquidation of cane dues”.
Several State governments were not only imposing a levy on molasses but also regulating the movement of non-levy molasses while most are imposing import-export duties on ethanol arriving or leaving its boundaries.
“There are some instances where octroi is also levied on ethanol for entry into municipal limits. The inter-State movement of ethanol requires no-objection certificates from State Excise Authorities along with permits from dispatching and receiving States,” added Paswan.
Low blend achievement
At present, it is compulsory to blend 5 per cent ethanol with petroleum but oil marketing companies have only achieved 1.37 per cent.
The Minister also pointed out that several steps had been taken to help millers, including the provision of interest-free loans and the export subsidy.
Despite the Centre’s help, the Indian Sugar Mills Association estimates cane arrears have crossed Rs.12,000 crore so far in 2014-15.