Timeline for loan disbursal under ethanol scheme extended in India

As part of its efforts to boost domestic production and achieve ethanol blending of 20% by 2025, the central government has extended the timeline for disbursement of loans up to September 30 with regard to all the schemes under the ethanol blending programme notified during 2018-2021. The move is aimed at facilitating the completion of the projects for entrepreneurs while availing interest subvention benefits.

Under the scheme, government is extending financial assistance in the form of interest subvention at 6 per cent per annum or 50 per cent of rate of interest charged by banks, whichever is lower, on the loans to be extended by banks for five years, including one-year moratorium.

The government has notified different interest subvention schemes for sugar mills and distilleries during 2018-2021, with a view to increasing production of ethanol and its supply under Ethanol Blended with Petrol (EBP) Programme, especially in the surplus season. This will also improve the liquidity position of the sugar mills enabling them to clear cane price arrears of farmers.

With the vision to boost agricultural economy, reduce dependence on imported fossil fuel, save foreign exchange on account of crude oil import bill and reduce air pollution, the government has fixed target of 10 per cent blending of fuel grade ethanol with petrol by 2022, and 20 per cent by 2025.