The Modi Sarkar has reduced GST on ethanol and biodiesel from 18 percent to 15 and 12 percent respectively. The reduction on tax is the result of the statement of the Prime Minister, Narendra Modi regarding the use of ethanol as auto fuel.
This Friday, Modi stated that India will be able to save 12,000 crores if people opt for ethanol blending program over the next four years. He spoke during the World Bio-fuel Day event held in New Delhi that India is targeting about 10 percent blending of fuel with ethanol by the end of 2022. This is likely to reduce India’s import bill, which is estimated to increase 24 percent from $88 billion to $109 billion, considering the global oil prices $65 per barrel.
Ethanol To Reduce Crude Oil Consumption
It is expected that the country will have 12 bio-fuel refineries and those will be owned by state-run companies including HPCL, IOCL, MRPL, Numaligarh refinery, and BPCL. In addition, the Indian government has planned to blend 5 percent biofuel by the end of 2030. As a result, the government has reduced the GST on ethanol and biodiesel to 15 and 12 percent respectively.
As per reported by Financial Express, Modi stated that India is currently saving Rs. 4,000 crores in foreign exchange owing to the ethanol blending program, which was started during the Vajpayee government. However, the previous government negated it for too long. In March 2015, the Indian Prime Minister set the target of lowering dependence on oil by 10 percent by the end of 2022. Moreover, the Indian biofuel business is expected to reach Rs. 50,000 crores by 2022, according to the ministry of petroleum estimates. In fact, during today’s global trade war, increasing prices of crude oil, and instability in the global market, even a slight dependence from oil import will be beneficial for India.
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