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Rising ethanol production and clampdown on illicit liquor trade is filling up the coffers of the Uttar Pradesh government.
In the financial year 2022-23, the state’s excise revenue increased 13 per cent to Rs 41,252 crore, which corresponds to about Rs 113 crore of excise collection a day.
The excise revenue in 2022-23 is Rs 4,931 crore higher that the preceding financial year of Rs 36,321 crore, according to UP Additional Chief Secretary (excise) Sanjay R Bhoosreddy.
For the current financial year, the Yogi Adityanath government is targeting an excise kitty of Rs 45,000 crore.
The state’s excise revenue has been growing fast owing to the proliferation in ethanol production over the past few years, apart from the weeding out of liquor smuggling and illicit liquor trade.
The state’s new excise policy is aimed at regulating the activities relating to manufacturing, transport, import, export, sale, and possession of intoxicants. The policy targets to attract private investment in the ethanol sector and, thereby, boost farm income, provide a market to farm produce and generate local employment.
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UP is India’s top sugarcane producing state, and ethanol is a by-product of sugar. The state is promoting the sector to establish a profitable value chain for sugarcane farmers, and thus help India reduce its oil import bills as ethanol is used in fuel blending.
The Centre has mandated 10 per cent ethanol blending in fuel. Ethanol produced in UP is exported to depots of the oil marketing companies, both within and outside the state, for blending. Currently, there are 85 operational ethanol distilleries in the state with the annual ethanol production capacity pegged at 2.45 billion litres (BL).
“Between March 2017 and February 2023, UP produced a total of 5.3 BL of ethanol,” said Bhoosreddy, adding that the excise department was contributing not only to revenue collection but also playing an important role in the development of the ethanol industry.
In 2021-22, about 965.5 million litres (ml) of ethanol was produced, of which 439.5 ml and 526 ml was supplied to the oil depots of UP and other states, respectively.
The excise department is also taking steps to use the molasses obtained as a by-product of sugar to produce alcohol, which could then be used to manufacture different types of chemicals, ethanol-blended petrol, sanitisers, and liquor.
