Bengaluru, August 25: Karnataka’s Home Minister Priyank Kharge raised concerns on Tuesday regarding the central government’s ethanol policy. He criticized the government for selling rice, purchased with taxpayers’ money, to ethanol-producing companies at nearly 40% below its cost.
Kharge stated, “The mathematics of ethanol in India is baffling.” He questioned the economic rationale behind using food grains for ethanol production.
He explained that the government buys paddy using taxpayer funds and incurs additional costs for storage and transportation. Despite these expenses, the same rice is sold to ethanol producers at a significantly reduced price through the Food Corporation of India (FCI).
Kharge asked, “What kind of economic policy is this? Who truly benefits from this entire system?”
He further noted, “Taxpayer money subsidizes grains, the government bears the costs of procurement, storage, and transportation, only to sell the same grains at a discount to ethanol companies. So, who is actually gaining from this arrangement?”
Kharge also raised concerns about whether large quantities of grains are being diverted for ethanol production to supply rapidly established ethanol factories with raw materials.
He questioned the central government’s approach of providing grains at low prices and then purchasing ethanol from the same companies at higher rates for blending with petrol.
He asked, “If grains are being sold cheaply and ethanol is being bought at a premium from the same industry, what benefit does this bring to the average consumer?”
Kharge inquired whether blending ethanol has led to lower petrol prices and if the impact on vehicle mileage and maintenance has been adequately assessed.
He concluded, “Who is subsidizing whom? Who are the real beneficiaries of this system? The center must provide clear answers.”
Kharge demanded that the central government transparently present the economic, social, and public interest implications of using food security grains for ethanol production.
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