India to allow ethanol-based 'flex engines' in vehicles, launch scheme in 3 months: Gadkari

India has decided to allow ethanol-based 'flex engines', which power vehicles using local farm produce and not fossil fuels, and will be rolling out a scheme on the same in the next three months, Union Minister Nitin Gadkari said on Monday.

Gadkari said other countries of the world like Brazil, the US and Canada have flex engines which are powered by farm produce and exhorted automakers like BMW, Mercedes and Toyota to develop vehicles running on the alternative fuel.

A switch to locally-produced ethanol will be helpful for a country like India which relies majorly on crude oil imports for powering the transport sector, he said, adding that it will also be less polluting and cost-saving.

A litre of ethanol comes at between 60-62 per litre as against the over Rs 100 paid for petrol, the minister said, admitting that the calorific value of the ethanol is low.

“In the US, Brazil and Canada, they have flex engines, so as the transport minister we are going to launch this flex engine facility to all the consumers in the country,” Gadkari said at an event organised by state-run lender Indian Bank.

“We are going to launch this scheme now and within three months we are going to start,” he added.

Gadkari said the government has already started giving permissions to establish 100 per cent ethanol petrol pumps and added that Prime Minister Narendra Modi has already inaugurated two such facilities in Pune, Maharashtra.

“We can make ethanol from sugarcane juice molasses and now the government is giving permission to make ethanol from food grains that are from rice, corn and food grains,” he said, asking states like Tamil Nadu, Maharashtra, Karnataka and Uttar Pradesh to take the lead.

At present, India allows for 20 per cent ethanol-blending in fuels. The country is saddled with excess stocks of rice and wheat as well, Gadkari said, after flagging hunger as one of the key challenges for the country.

He said Indian automakers including TVS and Bajaj have already developed two-wheelers to run exclusively on ethanol, asking their peers to develop their own models.

Speaking at the launch of a mentoring initiative developed by the bank for small businesses in Maharashtra, Gadkari said bankers also need to take the lead in identifying disruptive technologies of the future and fund them at the appropriate time.

Meanwhile, in order to increase credit supply to the all-important small businesses segment, Gadkari, who also holds the micro, small and medium enterprises portfolio, asked the industry to develop a robust rating system on which bankers can rely for lending.

Such a system, which will take inputs from a business's balance sheet, GST payments, turnover etc, can help speed up credit for the deserving businesses, Gadkari said.

He also asked banks to support lending to fishermen wanting to buy Cochin Shipyard's trawlers costing over Rs 1 crore, which will enable the boats to go deeper into the sea and increase the catch.

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