M'rashtra to promote alcohol from grains

In attempt to promote the production of alcohol made from grains, Maharashtra has introduced an incentive scheme for distillers of such alcohol and the industries which will use such alcohol for manufacturing of the different types of liquors, industrial chemicals and cosmetics.

The capital cost Of setting up a plant for the purpose will be refunded to the entrepreneurs who will set up plants to produce alcohol from grains. Industries that will use such alcohol will be given duty drawback of Rs 10 per litre on the purchase of such alcohol.

The notification to this effect was issued by the state government recently under the state's policy to promoting production of alcohol from grains.

The notification issued by the state government says, there has been a considerable increase in the demand for molasses both for consumption as well as industrial use. However, there is no further scope for increasing the area under sugarcane cultivation. The only alternative left to increase the production of molasses is to allow production of molasses from sugarcane directly. Instead of treating it as a by-product of sugar extraction. However, this will affect the production of sugar and is not advisable.

Since the state government has decided to promote the manufacture of alcohol from grains. This has two advantages. First of all, it will improve the condition of farmers who had no choice but to go for rain-fed crops like jowar, bajra, corn and others as their produce have an assured market.

All over the world liquors produced from grain are considered superior to that produced from molasses, Indian liquor export is very low. If liquor ia produced from grains, Indian liquor manufacturers can get access to the export market.

However, the price differential between the alcohol produced from molasses and that from grain is around Rs 6 to Rs 7 per litre, which is hampering the growth of the industry. Hence, the state government is considering an incentive scheme.

Under the scheme, if an entrepreneur sets up such a plant in regions identified as the most backward in the state like Marathwada and Vidarbha, then the entrepreneur is entitled to a refund of 200 per cent or Rs 50 crore, whichever is less on his capital cost.

If the plant is set up in other taluks of these two regions then he is entitled to a refund of up to 150 per cent or Rs 37.50 crore, whichever is less on his capital investment. If he sets up plant in other regions of state but if that particular taluk has been notified as backward, then the entrepreneur is entitled to a refund of 100 per cent or Rs 25 crore on his capital investment.

If the buyer of alcohol produced from grain maintains separate accounts on such purchases, then that buyer is also entitled to a duty drawback of Rs 10 per litre on excise duty.