The Cabinet Committee on Economic Affairs on Wednesday approved a modified scheme for extending interest subvention for those setting up grain based along with molasses based ethanol distilleries. The total outlay of the scheme is 8,460 crore for increasing Indias ethanol production capacity, with the scheme extended to those setting up distilleries using grain, molasses, dual feed, sugar beet, sweet sorghum, and cereals as a feedstock.
The assistance comes against the backdrop of ongoing protests by farmers against the new farm laws.The government would bear interest subvention for five years, including a one year moratorium against the loan availed by project proponents from banks at 6% pa or 50% of the rate of interest charged by banks whichever is lower, the government said. The government has been trying to connect with the politically-sensitive constituency of farmers through various policy measures. As part of the initiative, it has been pushing for ethanol production after surplus sugar production depressed sugar prices, which consequently increased the dues of sugarcane farmers.
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