The UP government has urged the Centre to hike the proportion in which ethanol can be mixed with petroleum products so that sugar mills can produce more ethanol to make good their losses due to the slump in the prices of sugar. |
The sugar mills in UP, particularly the private sugar refineries, are saddled with huge stocks of sugar because the state had record sugar production in 2006-07, touching 8.5 million tonnes, against 5.6 million tonnes in 2005-06. |
This issue was raised in the UP Assembly today. The minister for sugarcane, Nasimuddin Siddique, said the government would send a proposal on this to the Union government. He said at present the content of ethanol could be 5 per cent in petroleum products. |
The minister said against the total supply of 180 million litres of ethanol in the country, 80 million litres of ethanol was produced in UP alone. |
Raising this issue in the assembly, BJP member Hukum Singh said the state government should make compulsory mixing 25 per cent ethanol in petroleum products. |
He also said the UP government should also make special provisions for ethanol production in its proposed sugar policy. Singh said ethanol was being used as a fuel in many countries and in Brazil there was a compulsory mixing of 25 per cent of ethanol in petroleum products. |
"When it is an established fact that the hydrocarbon sources would end by 2040, the use of ethanol in a big way will enable the preservation of oil,'' he said. |
The UP Sugar Mills Association (UPSMA) petitioned the UP government in March for immediate relief in taxes so that there was no delay in cane payment arrears to farmers. The association has cited the sharp fall in sugar prices in domestic as well as international markets as the major cause for the crisis faced by the industry. |
The new government, instead of announcing any relief under financial stress, scrapped the sugar policy announced by the previous government. Twenty-two sugar mills set up after the new sugar policy was announced in August 2004 were exempted from entry tax, besides other benefits like the transport subsidy and exemption from trade tax and stamp duty. |
The UPSMA has demanded relief from the purchase tax levied at Rs 2 per quintal, society Commission which is levied at the rate of 3 % of the Statutory Minimum Price of the Sugar fixed by the Union government and the exemption from the entry tax. |
If the demands of the UPSMA are fully conceded by the state government then it could bring relief of Rs 1,500 crore on account of Purchase Tax and little over Rs 2,000 crore by way of society commission and close to Rs 100 crore if exempted from the entry tax. |