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Annexure-1
Government of Bihar
Department of Industries
Resolution
Subject:- Ethanol Production Promotion Poilcy, 2021
1. Preamble
Bihar is progressively adopting practices to create an investor-friendly environment in the state, so
as to facilitate investments. The state has adopted best practices for making a conducive
environment in the state to facilitate investments, employment generation and welfare of the
people. Measures like State Investment Promotion Board, Single Window Clearance, online
payments, online verification, self- certification, time-bound approval of licences/clearances,
availability of information online, standard operating procedures for approvals, deemed approvals,
etc. are being adopted by various departments and government agencies.
The overall objective is to maximize the value addition to state's natural resources by setting up
industries across the state, generating revenue and creating employment. Bihar Government is
also keenly working towards skill development, improving exports, Agriculture and Processed Food
products, Tourism, Renewable Energy to ensure increased industrial development across the
State.
In view of the above, this policy has been introduced after extensive deliberation with industries
experts, industry associations, investors, subject experts etc. This policy is proposed to make
Ethanol manufacturing in the State more attractive for potential investors. This Policy is aimed at
defining the broad contours of the government's mission towards augmenting the development of
Ethanol manufacturing Industries.
2. Background
In order to encourage sustainable and alternate fuels and also to cut India's dependence on
imports of fossil fuel oils, Government of India has taken multiple interventions including
administered price mechanism, opening alternate route for Ethanol production, amendment to
Industries (Development & Regulation) Act, 1951 which legislates exclusive control of denatured
Ethanolbythe Governmentof India, reduction in applicableGoods& Service Tax (GST)from 18%
to 5%, notification of National Policy on Biofuels - 2018, increasing scope of raw material for
Ethanol procurement, extension of Ethanol Blended Petrol (EBP) Programme to whole of India
exceptislandsofAndaman Nicobar& Lakshadweepw.e.f.01st ofApril,2019, et al.

The National Policy on Biofuels, 2018 approved in May, 2018 is aimed at achieving multiple
outcomes such as; addressing environmental concerns, reducing import dependency and
providing boost to agriculture sector.
The National Policy on Biofuels, 2018 allowed production of Ethanol from B-heavy Molasses,
Sugarcane Juice, and Damaged food grains like wheat, broken rice etc which are unfit for human
consumption. Regarding food-grains, the National Biofuel Coordination Committee (NBCC) was
empowered to allow specific raw materials based on the projected supply for the forthcoming year.
The NBCC has subsequently allowed production of Ethanol from Surplus Rice with Food
Corporation of India (FCI) and Maize.
Traditionally, Bihar has been leader in the Sugarcane production in India and is also home to large
number of Molasses based Distillery units. Ethanol manufacturing in the State using Sugarcane
Juice, Maize and Broken Rice as feed-stock has significant potential for growth. The National
Policy on Biofuels, 2018 and subsequent pronouncements by the Government of India offer a very
conducive regulatory and institutional eco-system for sustainable growth of Ethanol manufacturing
in States such as Bihar which is endowed with large number of feed-stocks such as Sugarcane,
Maize, Rice, etc.
This policy has been introduced with an aim to leverage the opportunities in Ethanol manufacturing
which offers a sustainable source of income for farmers, entrepreneurs and workers who will be
employed in the Ethanol units.
3. Objective
This policy aims to achieve the following objectives for the overall growth and development of
green-field new 100% Ethanol manufacturing industries in the State with a goal of providing
remunerative returns to investors, farmers and all other stakeholders:
• To allow production of Ethanol from all feedstocks permitted under National Policy on
Biofuels, 2018 and by the National Biofuel Coordination Committee
• To promote, facilitate and financially incentivize investment in fuel-grade standalone
new/green-field Ethanol manufacturing units in Bihar through instituting an enabling
environment and offering fiscal incentive
• To increase incomes of farmers producing feed-stock! raw material which may be used for
Ethanol manufacturing
• To create local employment opportunities through promotion of new Ethanol industries
4. Coverage and Scope
4.1. Eligibility for type of Units
Only standalone distilleries (single feed or dual feed) producing 100% fuel-grade Ethanol
which will be developed as Greenfield project shall be eligible for incentive under this
Policy.

4.2. Eligibility for type of feedstocks
Ethanol production from all feedstocks permitted under National Policy on Biofuels, 2018
and by the National Biofuel Coordination Committee shall be allowed in the State of Bihar.
Subsequent permission of any additional feedstock for Ethanol production by National
Biofuel Coordination Committee will be automatically allowed for Ethanol production in the
State of Bihar.
Notes:
a) Other eligibility conditions and incentives mentioned under Bihar Industrial Investment
Promotion Policy, 2016 shall also be considered for eligibility under this policy.
b) Only those Green-field standalone Ethanol manufacturing units shall be eligible for financial
assistance under this Policy which are producing fuel-grade Ethanol and are supplying 100%
of their Ethanol to Oil Manufacturing Companies (OMCs) under Ethanol Blending Programme
(EBP) of Government of India. For this purpose, at the time of Financial Clearance, the Units
will submit either (i) a copy of Tripartite agreement entered into among the Unit, their Bankers
and Oil Marketing Companies (OMCs), or (ii) purchase order from Oil Marketing Companies
(OMCs) for sourcing of Ethanol manufactured by the Unit.
5. Incentives to Ethanol Manufacturing Units
The Policy recognizes the need of additional incentive to eligible Units to further improve the
investment prospects in the Ethanol manufacturing sector in the state.
5.1 Guiding Principles
5.1.1 These provisions I principles shall be applicable to all eligible projects I units
underthis policy.
5.1.2 This policy shall come into force from the date of its notification.The said date
shall be considered as effectivedate of this policy from which its provisionsshall
come into force andwillbe applicabletill 31st March 2025.
5.1.3 Incentive under this Policy shall be offered after commencementof commercial
production bythe Unit.
5.1.4 Incentive under this Policyto the eligible Units covered underthe clause4 will be
in addition to the wide range of benefits eligible under the Bihar Industrial
Investment Promotion Policy, 2016. However, the maximum limit of incentive
underthis Policyshallbesubjectto cappingas per Clause5.2ofthis Policy.
5.1.5 For the purpose of calculation of capital subsidy under this policy, the value of
Plant and Machinery shall be that considered as part of Approved project cost
under Bihar IndustrialInvestmentPromotionPolicy,2016.

5.1.6 Only those green-field standalone Ethanol Units which are set-up on ZLD (Zero
Liquid Discharge) basis shall be considered under this Policy. The cost of setting­
up Effluent Treatment Plant (ETP) shall be included within the Approved project
Cost as mentioned in Clause 6.1.(xxii) of Bihar Industrial Investment Promotion
Policy, 2016.
5.1.7 Cost incurred in setting-up Captive power plant by eligible green-field standalone
Ethanol units shall be included within the Approved project cost.
5.1.8 Special Class Investors: In case of Scheduled Castes (SC), Scheduled Tribes
(ST), Extremely Backward Castes (EBC), Women, Differently-abled, War-widows,
Acid attack victims and Third gender entrepreneurs, the maximum limit of
incentive under this Policy shall be increased by additional 5%.
5.2 Capping of incentives
5.2.1 The incentive under this Policy is in addition to the incentives under Bihar
Industrial Investment Promotion Policy, 2016. However, the capping of sum total
of Interest Subvention Incentive under Bihar Industrial Investment Promotion
Policy, 2016 and Capital subsidy under this Policy shall be at 50% of the
Approved project cost under Bihar Industrial Investment Promotion Policy, 2016.
5.2.2 For Special Class ,Investors as referred to in Clause 5.1.8 of this Policy, the
capping will be 52.5% of the Approved project cost under Bihar Industrial
Investment Promotion Policy, 2016
5.3 Incentives under this policy
The quantum of capital subsidy under this Policy shall be 15% of the Cost of Plant and
Machinery or Rs. 5.00 crs, whichever is lower.
In case of Special class investors referred to under Clause 5.1.8, the
quantum of capital subsidy under this Policy shall be 15.75% of the Cost of Plant and
Machinery or Rs. 5.25 crs, whichever is lower.
5.4 Dovetailing with Central and State Government policies and schemes
(a) Dovetailing with Central Government policies and schemes would be allowed under
the Policy. Investors shall have to submit declaration of types and quantum of
incentives availed! to be availed by them under Central Government policies.
(b) Dovetailing with Bihar Industrial Investment Promotion Policy, 2016 would be
allowed under the policy. Dovetailing with State Government policies and schemes
other than Bihar Industrial Investment Promotion Policy, 2016 would be allowed

underthe policysubjectto the conditionthat the unit shall not avail subsidyagainst
thesameassetunderthis policyand suchotherpolicy.
(c) In case Investors avail any subsidy under Central Government schemes, the
amount of subsidy so availed! to be availed by them will be deducted from
the corresponding subsidy admissible under Bihar Industrial Investment
PromotionPolicy, 2016 or this Policy. For example - If an Investor avails 6%
interest subvention subsidy under a Central Government Scheme and the
applicableinterest rate on term loan availed by them is 10%, then balance
4% would be admissible under Bihar Industrial Investment Promotion Policy,
2016 subject to the upper limit specified in the Policy.
5.5 Special incentive package for Special class entrepreneurs
In order to promote Scheduled Castes (SC), Scheduled Tribes (ST), Extremely
Backward Castes (EBC), Women, Differently-abled,War-widows, Acid attack victims
andThirdgenderentrepreneursinthe State,theyshallbeentitledfor additionalsubsidy
underthepolicysubjectto the conditionthatentrepreneursunderthese categoriesshall
hold 100%stakeintheCompany!Firm promotingthe Unit.
5.6 Submission of application under this Policy
For availing incentive under this Policy, the eligible units would be required to submit
Stage-1 application latest by 30.06.2021. Every application for Stage-1 clearance
submitted by an Entrepreneur for setting up Ethanol manufacturing unit will be
processed in next seven (07) working days. Applications which are complete in all
respectswill be accordedStage-1 clearanceandthesamewill becommunicatedtothe
concernedEntrepreneur.
Eligible units which have availed Stage-1 clearance prior to the date of
notificationof this Policy will also be coveredunderthis Policy provided they have not
availedFinancialClearance.
5.7 Incentives on first-come-first-serve basis
Incentive under this scheme shall be offered on first-come-first-serve basis. All units
having applied for Stage-1 clearance latest by 30.06.2021 shall be eligible to avail
incentiveunderthis Policyprovidedthey alsosubmitapplicationfor FinancialClearance
on or before30.06.2022.
5.8 Total financial assistance to 100%green-field standalone Ethanol units
After the notification of this Policy, the eligible green-field standalone Ethanol
Manufacturing Units in Bihar will be entitled to avail Incentives under the following
policies ofthe Bihar Government-

1. Bihar Industrial Investment Promotion Policy, 2016
2. This Policy
Thus, eligible Ethanol units would be entitled to the following financial assistance:-
SN Type of Quantum of incentive Policy
incentive
1. Stamp duty 100% Exemption of Stampduty and registration
and fees (100% Reimbursement in case of Priority
registration Sectors)
fees
2. Land 100%Exemptionof Landconversionfees (100%
conversion ReimbursementincaseofPrioritySectors)
fees
3. Interest Interest Subvention Incentive at 10% of Term
subvention loan for a period of five years, upper limit being
incentive 50% of Project Cost, maximum Rs. 20 crs (In
caseof PrioritySectors,upperlimit being 30% of
ProjectCost, maximumRs.10crs)
.4. Tax related Tax related incentives (100% SGST
incentives reimbursement and 100% Electricity Duty
reimbursement)for a periodof five years, upper
limit being 100% of Project Cost {In case of
Priority Sectors, 80% SGST reimbursementand Bihar100% Electricity Duty Reimbursement, upper Industriallimitbeing 100%of ProjectCost} Investment
5. Employment 50% reimbursement (in case of male workers) Promotioncostsubsidy and 100% reimbursement (in case of female Policy,workers) of expenditure on account of 2016contribution toward ESI and EPF scheme for a
period of 5 years for new units for those
employeeswho aredomicileofBihar.
Maximum limit for reimbursementwill be
Rs. 1000/- per month for SC/ST and women
employee and Rs. 5001-per month for general
employee.
6. Skill Skill development subsidy of Rs 20,000 per
development employeel Bihar Skill Development Mission
subsidy (BSDM) rates whichever is lower.This incentive
will be applicable for training of employeesl
staffswho are domicileofBihar
7. Capital Capital subsidy at 15%of the cost of Plant and This Policy
subsidy Machinery,maximumRs.5crs

Note:
1. In case of Micro and Small units, following additional incentives are given- (i) Rate
of interest subvention is 12% instead of 10%; and (ii) The upperlimit ofTax related
incentives is increasedbyadditional30%oftheApprovedprojectcost.
2. In case of Special Class Entrepreneursreferred to in Clause 5.1.8 of this Policy,
following additional incentivesare given- (i) Rate of interest subventionand upper
limit of interest subventionincentiveboth is raised by additional15%of the limit; (ii)
The upper limit of Tax relatedincentivesis raised by additional15%ofthe limit. (iii)
The upper limitof capitalsubsidyis raised byadditional5% ofthelimit.
3. This Clause 5.8. is merely for presentation purposes. For terms and conditions
related to incentives under Bihar Industrial Investment PromotionPolicy,2016, the
policy document should be referred to. In case of any inconsistencybetween the
information presentedin this Clause and provisions of the said policy,the latter will
apply and prevail.
5.9 Timeline to be followed by Entrepreneurs and Department of Industries
• 5tage-1 Clearance: Entrepreneurs should submit application for Stage-1
clearance latest by 30'" June, 2021 on Single Window Clearance portal
(swc.bihar.gov.in) of Department of Industries. Department of Industries will
issue Stage-1 clearance within next seven (07) working days to applications
which are completeinallrespects.
• Land allotment by BIADA: Entrepreneurs should submit application for land
allotment on BIADA portalwhich will be disposed by BIADAwithin next seven
(07) working days.
• Financial Clearance: Entrepreneurs should submit application for Financial
Clearance latest by 30'" June, 2022 on Single Window Clearance portal
(swc.bihar.gov.in)of Departmentof Industries.
6.Policy implementation, monitoring and grievance redressal
6.1. Policy Implementation
(i). Department of Industries, Government of Bihar shall be the nodal agency
responsible for implementationof this policy in the State. Director of Industries
shall bethe nodalofficerforthis policy.
(ii). Incentives under this policy shall be processed as per the provisions of Bihar
Industrial Investment Promotion Act, 2016 and Bihar Industrial Investment
Promotion Rules,2016.

(iii). Units applying for incentive under this policy shall apply on the Single Window
Clearance (SWC) portal (https:/Iswc.bihar.gov.in) of the Department of Industries,
Government of Bihar.
(iv). Government of Bihar will promote fuel-grade Ethanol manufacturing in the State.
For this purpose, the State Investment Promotion Board (SIPB) constituted as per
Section 4 of the Bihar Industrial Investment Promotion Act, 2016 shall be
empowered to issue directions to concerned Departments/ Agencies of the State
Government. All NOCs, permissions and clearances required by Ethanol
Manufacturing units from Prohibition Excise & RegistrationDepartmentand other
Departments/ Agencies of Bihar Government will be provided through Single
Window Clearance (SWC) portal (https:/Iswc.bihar.gov.in) of the Department of
Industries,Governmentof Bihar.
(v). Department of Industries shall extend hand-holding support to the Investors
setting up Ethanolmanufacturingunitsin land allotmentfrom BiharIndustrialArea
Development Authority (BIADA), land registration for private land and land use
conversionandotherapplicableclearances/licences! NOCs.
(vi). BIADA landshall beallottedtostandaloneEthanolmanufacturingunitsonpriority.
Every application for land allotmentsubmitted by an Entrepreneurfor setting up
Ethanolmanufacturingunitwill beprocessedin nextseven(07)workingdays. For
this purpose, a weekly meeting of the Project Clearance Committee (PCC) of
BIADA will be held to clear all applications for High-prioritysector unitsreceived
within a week. Units proposingto set-up standalone Ethanolmanufacturingplant
shall be given preference in land allotment over other high-priority sector
proposals.
6.2. Policy monitoring and grievance redressal
(i). The implementationofthe policywill be reviewedfrom time totime andnecessary
facilitation and course correction shall be undertaken as found necessary to
achieve the objectivesofthis policy.
(ii). Department of Industrieswill develop web-based interaction mechanismwhere
suggestions and complaints can be directly addressed to the Department of
Industries.
6.3 Program awareness and Capacity Building
(i). Programs for creation of various levels of awareness /capacity buildingfor self­
reliance in the field of domestic energy will be run. With this. the rural economy
will be strengthened aswell asthe role and importanceof the bio-fuelssectorwill
beestablishedfor selfemploymentopportunities.

(ii). Emphasis will be given on human resource development, training and capacity
building. For this, government and other institutions will be encouraged for various
level training, to ensure the availability of trained manpower at all levels in the bio­
energy sector.
7. General conditions
(i). As per the National Policy on Biofuels, 2018, the Bureau of Indian Standards (BIS) has
already evolved standards for bio-ethanol, biodiesel for standalone and blended form
applications. The Bureau of Indian Standards (BIS) has developed a standard (E.S.
15607) for Bio-diesel, which has been taken from the American standard ASTM-D-6751
and the European standard E.N. 14-14214. Apart from this, the Bureau of Indian
Standards has developed standard I.S. -2796: 2001, including 5% and 10% Bio-ethanol
Blend. Compliance will be ensured in each condition of standards set by the Bureau of
Indian Standards in the production of bio-ethanol, biodiesel, drop-in-fuel, methanol and
other bio-fuels.
(ii). If any false declarationis given for the purposeof availing incentives or if incentivesare
availed for a unit that was not eligible or any violation of the condition of this policy,the
amount of incentiveis liable to be recoveredfrom the date of availing such benefitalong
with the interestcompoundedannually@ 18%perannum.Incase of non-paymentwithin
the stipulated time, the State Government may recover such amounts includinginterest
as arrearsofland revenue.
(iii). If a Unit after availing incentive underthis Policydivertsthe productionfacilityto produce
any product other than fuel-grade Ethanol to be supplied to Oil Marketing Companies
under Ethanol Blending Programme of Governmentof India, the amount of incentiveis
liable to be recovered from the date of availing such benefit along with the interest
compounded annually @ 18% per annum. In case of non-payment within the stipulated
time, the State Government may recover such amounts including interest as arrearsof
landrevenue.
8. Words used in this Policy shall have the same meaning as assigned to them under Bihar
Industrial Investment Promotion Policy, 2016 or National Policy on Biofuels, 2018, as the
context may require. All matters of interpretation/disputesshall be decided by the Industrial
Development Commissioner/ Principal Secretary, Department of Industries. Such
interpretation/decisionshall befinal.
9. Industriesmentionedin the negative list of BiharIndustrialInvestmentPromotion Policy,2016
would notbe eligiblefor any incentive underthispolicy.
10, In case of any discrepancy in the meaning and interpretationof the translated versionofthis
policy,the Englishlanguageversion shall bebindinginallrespectandshall prevail.

11. This policy will come into effect from the date of issue of this notification and will remain in
operationtill 31stMarch2025.
Bythe orderofthe Governorof Bihar
~"~:':~JAdditionalChief Secretary,
Departmentof Industries,Bihar,Patna.
MemoNo- l- S1- IPatna, Dated- \ l- h)0 \ ~IJ~,
FileNo-4ITech.lEthanoiPolicy109/2021
Copy to: The Superintendent, State Printing Press, Gulzarbagh, Patna to publish in the
special edition of Bihar Gazette.It is requestedto print 1000 copies of the publishedgazette
and makeit availabletothe Department. ~
Ad~~I~fse~
Departmentof Industries,Bihar,Patna.
MemoNo-"1-5i- IPatna, Dflled- 1l-1()~\~1J.}_'
FileNo-4ITech.lEthanoiPolicy109/2021
Copy to: The Accountant General (Accounts & Title), Bihar, Patnal Treasury Officer,
SecretariatTreasury,VikasBhawan,Patnafor information.
~
Ad~n:l~sec~~
Departmentof Industries,Bihar,Patna.
MemoNo-"1-51- IPatna,
FileNo-4ITech.lEthanoiPolicy109/2021
Copy to: All Heads of Departmentsl All Corporations! Authorities of the Department of
Industriesl P.S. to Minister, Department of Industries! P.S. to Secretary, Department of
Industries,Bihar,PatnalDirectorof Industries,Bihar,PatnalDirector,Technical Development,
Bihar, Patnai Director, Food Processing! Director, Handloom & Sericulturel All General
Managers,DistrictIndustriesCentresfor informationandnecessaryaction.
~WA~~al~efsec~
Departmentof Industries, Bihar,Patna.

Memo No- 1-51- IPatna, Dated- \ 1-,~~~~<1_'FileNo-4fTech./Ethanol Policy109I 2021
Copy to: All Divisional Commissionersl All District officers/Ail Deputy Development
Commissioners! Resident Commissioner, Bihar Bhawan, New Delhil Director, M.S.M.E.D.I,
Patliputra, PatnalMuzaffarpur I Secretary to the Chief Minister, Biharl Chairman-Cum­
Managing Director, Bihar State Power Holding Company Limited, Patna for information and
necessaryaction.
~»iJ;,.WI: -''1I'SI~AdditionalChiefSecretary,
Departmentof Industries,Bihar,Patna.
MemoNo- i- S4- IPatna, Dated- 11-\D'0\~ <l~ '\
FileNo-4fTech'/Ethanol Policy109I 2021
Copy to: O.S.D to Chief Secretary, Bihar, Patnal Principal P.S. to the Development
Commissioner,Bihar, Patnafor information.
~ Nl~~Additio~alChiefsecre~ry~l 1'"31viDepartmentof Industries,Bihar,Patna.
MemoNo- "i-S"\- IPatna,
FileNo-4fTech'/Ethanol Policy109I 2021
Copyto: IT Manager, Departmentof Industries,Bihar,Patnafor uploadingthecopyofthe
resolutiononthe DepartmentalWebsite.
b.tvt~Jv -AdditionalChief Secretary, II(~IJfDepartmentofIndustries,Bihar,Patna.

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