In a bid to reduce the country?s huge oil import bill, the government after much deliberation on Thursday gave its nod to National Policy on Biofuels besides giving approval for setting up of National Bio-fuel Coordination Committee and Bio-Fuel Steering Committee. Under the approved policy, the country aims to raise blending of biofuels with petrol and diesel to 20% by 2017.
More than seven ministries and the Planning Commission have been debating about the biofuel policy for the last two years and a group of ministers (GoM) headed by agriculture minister Sharad Pawar had been anchoring the discussion prior to finalisation of the policy.
Although in the draft policy there was a provision of creation of National Bio-fuel Development Board, which was opposed by the Planning Commission on the plea that it would not be feasible for such a high level Board, similar to the Cabinet Committee with representatives from seven ministries, to meet frequently to take up issues in the bio-fuel sector.
Instead the Planning Commission had suggested creation of National Bio-fuel Coordination Committee chaired by the Prime Minister, which was given green signal by the cabinet. The bio fuel policy calls for scrapping taxes and duties on bio-diesel and declared goods status being conferred on bio-diesel and bio-ethanol. Declared goods status would mean that the two would attract a uniform central sales tax or VAT rate rather than varied sales tax rates prevalent in states.
The Biofuel Steering Committee would be chaired by the Cabinet Secretary, which, along with the National Biofuel Coordination Committee would be serviced by the Ministry of New and Renewable Energy. Besides, the Panchayati Raj ministry would also be included as member in the Steering Committee.
A sub-committee, comprising the department of biotechnology and the ministries of agriculture, new and renewable energy and that of rural development under the Steering Committee would aid research on bio-fuels.