The government is taking significant steps to enhance ethanol production by offering financial support to sugar mills and grain-based distilleries. These initiatives aim to strengthen the ethanol supply chain and promote sustainable fuel alternatives, aligning with the country’s clean energy goals.
According to official data, a total of 304 ethanol manufacturing distilleries (including standalone distilleries and distilleries attached with sugar mills) have availed/ are availing financial assistance under the schemes notified from 2018 to 2022
In response to an unstarred question in Lok Sabha, Minister of State for Consumer Affairs, Food & Public Distribution, Nimuben Jayantibhai Bambhaniya, revealed that the government has granted in-principle approval to 1,212 eligible projects aimed at boosting ethanol production capacity. These include:
590 molasses-based projects, 474 grain-based projects and 148 dual-feed projects
With a total budget outlay of ₹4,687 crore, the government has designated the National Bank for Agriculture and Rural Development (NABARD) as the Nodal Agency responsible for releasing interest subvention to eligible sugar mills and grain-based distilleries. Funds are disbursed to NABARD for further allocation to lending banks supporting ethanol production projects.
As per NABARD’s report, six distilleries in Karnataka have been classified as Non-Performing Assets (NPAs) by their respective lending banks since the scheme’s inception, the minister informed.
This proactive government support underscores India’s commitment to expanding ethanol production, reducing dependency on fossil fuels, and fostering a greener energy future.
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