Telangana govt mulls ethanol policy to address industry challenges
The Telangana government is considering introducing an ethanol policy to support the industry and address concerns from farmers and locals. Despite 29 approved projects, only six are under construction, with challenges in land acquisition and excise tax burdens. Industry leaders seek incentives, tax relief, and oversight transfer to the industries department, following models in states like Karnataka and Andhra Pradesh.
Hyderabad: The Telangana govt is considering the introduction of an ethanol policy even as the ethanol industry is facing tough challenges. The proposed policy aims to address the concerns of both farmers and the ethanol industry.A few weeks ago, representatives from the ethanol sector presented their case to the Telangana Rythu Commission and the industries department. Official sources reveal that nearly a dozen states, including Karnataka, Chhattisgarh, and Madhya Pradesh, have already implemented ethanol policies to support the industry.In Telangana, although the Centre issued letters of intent (LoIs) to 29 industries over the past two to three years, only six are under construction, located in Kamareddy, Khammam, Suryapet, Makthal, and Siddipet (with two units). Only one plant in Narayanpet is operational. Companies that began construction, such as those in Makthal, have faced challenges related to land acquisition.The opposition from farmers and locals, particularly after the incident in Dilawarpur village in Nirmal, where there was resistance to land acquisition, has further complicated matters. Industry leaders are urging the govt to implement solutions in the policy, such as offering incentives or packages to ease the land acquisition process, since the lands in question are private.
Additionally, the companies are requesting the govt to address concerns from farmers and locals about potential pollution from the units, emphasising that these concerns are unfounded.One key issue raised by the ethanol industry is the excise tax of Rs 1 per litre of ethanol produced. While the Centre imposes a 5% GST on ethanol, Telangana also collects excise tax. In contrast, Karnataka and Andhra Pradesh have fully exempted ethanol from excise tax. Furthermore, industry leaders are advocating for the transfer of ethanol policy oversight from the excise department to the industries department, as is the case in many other states. “This would streamline the process and foster growth,” said K Siva Rama Krishna, project director of Jurala Organic Farms and Agro Industries.Officials also highlighted that the Centre has been actively promoting the ethanol industry as part of its efforts to reduce the carbon footprint. In 2015, the Centre introduced a ‘bio-fuel’ policy, reducing GST on ethanol from 18% to 5%, and has since been blending ethanol with petrol. A senior official from the industries department mentioned that the Centre had previously halted the procurement of surplus foodgrains from the Food Corporation of India but has recently resumed supplying surplus foodgrains at a cost of Rs 22.50 per kg.
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Source : The Times Of India
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