The Planning Commission has opposed setting up of the national bio-fuel development board. The commission told the group of ministers on biofuels headed by agriculture minister Sharad Pawar on Wednesday, that it would not be feasible for such a high level board, similar to the Cabinet Commmittee, with representatives from all ministries, to meet frequently to take up issues in the bio-fuel sector.
The commission also said that once the national bio-fuel policy is cleared, there is no need for a high level board, as the proposed board would have little role to play.
To give a push to production and use of bio-fuel, the commission has recommended free import of fatty acid oils. Imports are likely to happen with suitable duty rebates till India is able to improve bio-fuel production.
The move, till recently, was opposed tooth and nail by the sugar lobby saying that it would further dampen the prices of already sickening sugar industry.
Suggesting ways to encourage plantation of jatropha and karanj for production of bio-diesel, the commission said employees and cultivators engaged in such plantations should be covered under the national rural employment guarantee programme. Corporates should be given tax cuts to take up contract farming of these crops in private wastelands and to corporates entering into purchase contracts with the cultivators.
Bio-diesel should be exempt from all kinds of taxes and duties and the benefits earned from these concessions should be taken into account while fixing the minimum support price (MSP) so that they accrue to the cultivators growing the oilseeds. The prevailing diesel prices should be taken as the minimum support price (MSP) for purchase of bio-diesel by the oil marketing companies. The MSP should be such that it provided adequate income to the cultivators. The corresponding bio-diesel price should be considered as the minimum benchmark price of bio-diesel, the Plan panel said and pointed out that there is no provision in the policy to revise MSP periodically to ensure that the tillers get fair price for their oilseeds.
The government would also look into the commission?s proposal to set up a joint committee of the department of bio-technology, ministry of new and renewable energy and the ministry of agriculture to promote, support and coordinate research for developing high yield varieties of bio-diesel plantations. On the issue of mandatory blending of bio-diesel with diesel, the commission said that owing to present uncertainty in the availability of bio-diesel, blending should be made mandatory only after an estimated amount of bio-diesel is available. Thereafter, the proportion of blending should be increased annually.
To ensure steady availability of bio-diesel, oil marketing companies should be permitted to bank the extra proportion of blending in a particular year and carry it forward to the year when there might be a shortfall.