Cabinet clears hike in ethanol price, more money for jute farmers, dam safety

The Union cabinet chaired by Prime Minister Narendra Modi Thursday approved the increased price for procurement of sugarcane-based ethanol.

New Delhi: The Union cabinet chaired by Prime Minister Narendra Modi Thursday approved the increased price for procurement of sugarcane-based ethanol.

The cabinet on economic affairs cleared the proposal for compulsory use of jute bags in the packing of food grain while for sugar packing the compulsory use ceiling has been fixed at 20%.

The cabinet also approved the second and third phase of dam rehabilitation and improvement programme at an estimated cost of over Rs 10,200 crores, informed union minister Prakash Javadekar.

“The price of sugar and sugar syrup based ethanol has been increased to Rs 62.65 per litre, it is an increase of Rs 3.25 per litre. While B-heavy ethanol will now fetch Rs 57.61 a litre and ethanol based on C-heavy will fetch Rs 45.69 per litre. The total increase is in the range of Rs 2 per litre to Rs 3.25 per litre,” Information and Broadcasting Minister Prakash Javadekar told reporters.

Javadekar said the GST and transportation cost will be met by oil marketing companies that will procure the ethanol for fuel blending.

The decision will be directly beneficial for sugarcane farmers of Maharashtra, Gujarat and Karnataka as most of the mills are owned by cooperatives that pay advance money to sugarcane farmers, said the minister.

He said it would also be beneficial for sugarcane farmers in India’s most populous state Uttar Pradesh as more money into the hands of private sugar mills will eventually benefit the farmers of the state.

Javadekar said despite a massive increase in the procurement of ethanol for fuel blending, from 38 crore litres in 2018 to 195 crore litres in 2019, it is still 40-45% of the total requirement for 10% fuel blending of ethanol.

He said an increased blending of ethanol will save the forex reserves and import cost for the country.

Relief for jute farmers

In yet another important decision that will directly benefit farmers in jute growing states, the Union cabinet approved the proposal for compulsory use of jute bags in food grain packing. For sugar packing, the ceiling for compulsory use has been fixed at 20%.

“100% food grains and 20% of sugar will be packed in jute sacks. It will lead to increased jute demand in coming years. Every farmer will get an additional income of Rs 10,000 per hectare,” said the minister.

The decision is expected to benefit over 4,00,000 farmers of West Bengal, Odisha, Tripura, Meghalaya and Andhra Pradesh.

The minister said 10% of jute sacs will be open for auction on the Government e-Market place (GeM) portal.

Rs 10,211 crore for dam safety

The cabinet also approved the second and third phase of dam rehabilitation and improvement programme at a cost of Rs 10,211 crores.

Jalshakti minister Gajendra Singh Shekhawat said the programme will be implemented in two phases of four years each with an overlapping period of two years, taking the total implementation period to 10 years.

Shekhawat said with 5,034 existing dams and 411 dams under construction, India is the third largest country in terms of dams following the US and China.

“Eighty percent of dams are 25 years are older. With this programme, overall safety and productivity of these dams will be improved,” Shekhawat noted.

Shekhawat said 80% funding of the programme will be through multilateral lending institutions such as World Bank and Asian Infrastructure Improvement Bank (AIIB) and 19 states and two central organisations will be involved in the second and third phase of the programme.

The minister also informed that rehabilitation work of over 200 dams has already been completed.

The minister said 4% money of the total outlay will be spent in creation of tourism, water based tourism and fisheries related projects at these dams which will help generate revenue for continuous upkeep of these dams.

(Article by Krishnanand Tripathi)