What sugar industry expects from Union Budget 2022-23

The Union Budget 2022-23 is enthusiastically anticipated as it is contemplated to set better pace for uplifting India’s economy that witnessed a slump since the Covid-19 pandemic. Every industry is envisaging enforcement of measures that give a boost and also supplement market trends. On the sugar industry side there have been expectations, better schemes to support the sugar industry, higher allocation of funds that aims to support ethanol production and clarity on medium term transport fuels policies given concurrent push for biofuels (ethanol, methanol, CBG) alongwith LNG, EVs.

In conversation with ChiniMandi News, Mr.Tarun Sawhney, Vice Chairman and Managing Director of Triveni Engineering & Industries Limited shared his views on the key expectation from Budget 2022. He shared, “We hope that in the upcoming budget, the Government brings reforms to ensure an attractive incentive for the excess yield which will be beneficial for the producer as well as the farmers. We also look forward to the Government’s financial support in ways like reinstatement of subsidy at least for the first 200 demonstration projects, realistic pricing of CBG and reduction in GST on plant & equipment in order to unlock the potential of Compressed BioGas (CBG) and exponentially grow this opportunity which is at a nascent stage right now but would be immensely beneficial for rural India. We hope that the Government would soon plan and allocate necessary resources for the development of a trading market for Compressed Bio-Gas (CBG) CERTIFICATES which will be used towards carbon abatement as part of national carbon accounting standards (carbon scores for CBG), in line with the Government’s focus on environmentally clean energy sources.”

Speaking to ChiniMandi News, Mr. Vijay Nirani – Managing Director, MRN Group expressed his views on his expectations from the Union Budget 2022. He said, “The upcoming budget should widely focus on how we can create a true cyclical economy in India for India. This will result in a great boost for the local economies with sustainable benefits for the farmers of our Nation.”

“The Indian Government can also achieve significant economical and environmental development by allowing and providing subsidies to companies to develop and promote biofuels and further enhancements on these fronts. SATAT has already helped this to a certain extent. But further thoughts & necessary support on the value chain can result in a far reaching impact.” He further added.

Recently, the Industry body Confederation of Indian Industry (CII) has urged the Government to provide incentives for the bioenergy sector and bring out a policy roadmap that includes return of concessional import duty of 2.5% on ethanol to provide feedstock for the domestic industry at better rates. In its pre-budget recommendations to the finance ministry, CII has sought clarification on concessional duty that was applicable on ethanol imported for use in manufacture of chemical products from 1 July 2017 till 1 February 2021.

In a report by CARE Ratings on Expectations from the Union Budget for 2021-22, sharing views on the Sugar Industry, they mentioned, “The government may continue to make allocations towards schemes for development of the sugar industry as the problem of sugarcane arrears remains. With the Government aiming to increase diversion of sugarcane towards ethanol and fixing ethanol supply targets for various states where it advises each state’s sugar mills/distilleries to utilise at least 85% of their existing installed capacities to produce ethanol, we may see higher allocation of funds that aims to support ethanol production”

In recent years, Ethanol has emerged as a major contributor to India’s shift to renewable energy while conforming to the “Atma Nirbhar Bharat” initiative of the Government of India. The rapid increase in its supplies supported by favourable policies and regulations, improvement in technology to produce ethanol from plant-based sources, availability of land, increasing production of food grains and sugarcane, etc. have made the Government advance its E20 target to 2025 from 2030. And as this wonder indigenous fuel assists in ensuring a cleaner environment, the Ethanol story is simultaneously assisting the farmers in a big way, by enhancing their income, infrastructure development leading to rural development, job creation among others – making it a classic case of sustainable development. However, with sugarcane equivalent to an estimated 34 lakh metric tonnes of sugar diverted for ethanol production during SS 2020-21 vs. the target of 60 lakh metric tonnes, the industry needs continued support to solve the problem of high inventories of sugar while also improving the export prices.


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