Bihar became the first state in the country to have its own ethanol policy, Ethanol Production Promotion Policy 2021, which has been approved by the Cabinet.
The new Policy will permit ethanol production in the state from all feed stocks permitted by the National Policy on Biofuels 2018, and subsequently by the National Biofuel Co-ordination Committee.
In December 2020, the Cabinet Committee on Economic Affairs (CCEA) had approved a modified scheme for extending interest subvention for those setting up grain-based along with molasses-based ethanol distilleries.
So far, the Centre has granted permission for ethanol production from B-heavy molasses, C-heavy molasses, grains unfit for human consumption, sugarcane juice, sugar, sugar syrup, surplus rice and maize.
The Ethanol Production Promotion Policy 2021 promotes new standalone ethanol manufacturing units by providing them additional capital subsidy at 15 percent of cost of plant and machinery up to a maximum of Rs five crore.
The capital subsidy will be in addition to the existing incentives under the Bihar Industrial Investment Promotion Policy, 2016.
Under the industrial policy, the units are offered exemption from stamp duty and registration fees, exemption from land conversion fees, interest subvention incentive, SGST reimbursement and electricity duty reimbursement, employment subsidy and skill development subsidy.
The new Policy also provides additional subsidy for special class investors like SCs, STs, EBCs, women, differently-abled, war widows, acid attack victims and third gender entrepreneurs. In their case, the capital subsidy will be 15.75 percent of cost of plant and machinery up to a maximum of Rs 5.25 crore.
The Policy lays significant emphasis on issuing licences and clearances in a time-bound manner for new standalone ethanol units.
Stage-1 clearance will be issued to units in seven working days; application for BIADA land allotment will be disposed of in seven working days and the department of industries will hand-hold investors/ entrepreneurs in private land registration and land conversion and also in availing all licences/clearances and NOCs required for setting up units.
The industry department has also fixed timelines for applying under the scheme. The investors will have to apply for Stage-1 clearance latest by 30 June 2021 and then apply for financial clearance latest by 30 June 2021.