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Thursday, October 21, 2021
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India saved Rs 20,000 Cr on fuel imports: Centre; dismisses apprehension over sugarcane diversion for ethanol

New Delhi, Oct 7: The Narendra Modi government on Thursday dismissed apprehensions expressed in certain quarters about the diversion of sugarcane for ethanol production at the cost of food security, making it clear that it was the surplus that was being transferred for fuel purposes.

It said that blending ethanol with fuel out of the surplus stock has helped the country save Rs 20,000 during the last six years and the additional benefit will be to the tune of Rs 10,000 crore during this year.

“It is very important to understand that for a young country like India while meeting food requirements are of paramount importance, fulfilling the energy needs through all means is also significant. Thus, the changed perspective should be food with fuel and not food versus fuel,” the Ministry of Petroleum said in a communication.

During the 2020-21 sugar season, the total sugarcane production is expected to be around 340 lakh metric tonne, way above the cumulative domestic consumption of 260 lakh metric tonne. The surplus quality of 35 lakh metric tonne will, therefore, be diverted for ethanol production. 

The surplus could have triggered a fall in sugar prices in the market and hampered the interest of farmers, the communication said.

It added that the government has already injected Rs 35,000 crore in the liquidity starved sugar industry for use of the surplus as ethanol. The move has helped in the early settlement of dues of the cane farmers. During the current year, an additional Rs 20,000 crore will be infused for the ethanol production programme.

The Centre as a policy measure allowed conversion of surplus stocks of rice with FCI for ethanol production along grains such as maize for ethanol production.

“Higher conversion of maize to ethanol will also enable higher DDGS (cattle feed) production across the country which will again aid the rural economy. This will also encourage farmers to switch crops and change their crop pattern in view of additional demand generated by diversion of food grains to fuel”, the communication underlined.