Mental blocks

ABOUT two years ago, Anil Mehta started a biodiesel distribution centre in the northern region by setting up an outlet in Fatehabad, Haryana, under the AdeZel brand. The growth has been quite slow. Even after two years of his first venture, Mehta could expand his biofuel brand at Hanumangarh in Rajasthan. The opening of the third outlet at Barwala in Hisar is, however, stuck due to statutory clearances. Indeed, the lack of government's will and support are hampering the growth of the second-generation biofuels.

Mehta points at tax anomalies. "In September 2016, Chief Minister Manohar Lal Khattar had announced exemption of biofuels from the value added tax. The announcement was a welcome step towards promoting this alternative fuel. However, when the GST regime was launched in the country from July 2017, biofuels were placed under the category of 18 per cent tax slab leading to near-throttling of our business. Later, it was placed in the 12 per cent category in November last year," he says. The industry demands a 5 per cent GST on clean fuel.

Hassles in regulatory clearances are hampering its growth. "No objection certificates from as many as 12 agencies are required before moving the file of change of land users (CLUs). All departments take their own time. On the one hand, the state government talks of introducing ease of doing business, but on the other hand, the government cannot introduce single-window clearance in cases of biofuel outlets," Mehta says. The agencies include the deputy commissioner, the subdivisional magistrate, the forest department, the district food and supplies controller, the pollution department, the fire department, the electricity department and the public health engineering department.

Blending of biofuel with auto fuel is another issue which has been awaiting government's approval. The business will flourish after blending is allowed. 

The other issue is its acceptance by the customer. It seems that while farmers don't see any problem in using this fuel to run their tubewells or tractors, very few car owners are willing to take the risk even as the fuel is cheaper by Rs 2 per litre.