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Home News Reports 'Govt is paying MSP much higher than market price for some crops': Nitin Gadkari...

‘Govt is paying MSP much higher than market price for some crops’: Nitin Gadkari speaks on farm reforms, ethanol fuel and more

Gadkari said that last year we exported 60 lakh tons of sugar with a subsidy of Rs.600 crore. While the price of sugar in the international market is Rs.22 per KG, the government paid Rs.34 per KG for the sugarcane.

In a recent interview with the Indian Express, Union Minister for Road Transport & Highways and the Minister of Micro, Small and Medium Enterprise Nitin Gadkari talked about future of electric vehicles, possibilities of improving farmers’ income with ethanol production, research on sodium-ion batteries, Tesla in India and more. Here is a glimpse of changes India will experience in the coming days.

Large-scale production of electric vehicles (EVs in India)

The Union Minister while answering a question on large-scale production of EVs in India said that many small companies are already manufacturing e-bikes and e-scooters in Uttar Pradesh and other states. The main issue these companies are facing is the availability of the lithium-ion battery. As a significant stake in lithium-ion mines, including those in Argentina, are under Chinese hold, it is little problematic for Indian manufacturers.

However, the Minister said that there is a lot of research going on in developing aluminium-ion. These aluminium-ion batteries will not only be readily available but will cost much less compared to the lithium-ion batteries. Gadkari gave the example of the Indian Space Research Organization (ISRO) that uses different types of batteries to send satellites. The research for alternate is on the final stages, and the Minister said he is confident that out IITs and engineers will get success in the field.

He said, “I am confident that in some time we will get a lot of new alternatives, and soon EVs will be the future of the country.” In cities like Mumbai, Pune, Nagpur etc. the number of electric buses is increasing. Even the electric tractor is in the process of making. Recently, Gadkari also launched JCB that runs on CNG. The Union Minister asserted that a lot is happening in the field that will help in reducing pollution substantially in coming years.

Tesla’s arrival at India

While talking about Tesla, the Minister said that the company would start its operations in India by early 2021. However, the Minister said that it would be better to talk about it from the manufacturing point of view after Tesla starts operations in India. There is a lot of research going on in the field of bio-fuel, ethanol, methanol, bio-CNG, bio-diesel, etc. that will bring major brands to India. Tesla is going to start with sales, and once the sales increase, they will start assembling and then manufacturing, Gadkari said in the Indian Express interview.

Though infrastructure is improved, a lot is still to be done

While talking about the infrastructure like roads, railways, Metro etc. In India, the Minister said that it is true we are not of a global standard. However, we are improving quickly. He mentioned the multi-modal station worth Rs.1,200 crore in Nagpur that is designed by an American Architect. He said, “It will be among the five best railway stations in the world. So, things have begun to happen slowly.”

Gadkari discussed his plan to involve private players in Metro infrastructure in Nagpur. He said the cost of building the Metro in Nagpur, Pune and Delhi is Rs.350 crore per KM. The one he has proposed will cost Rs.5 crore per KM (the Nagpur broad gauge Metro) which will use the existing railway stations and lines and signals. The broad-gauge six-coach Metro will run at a speed of 160 kmph. All permissions have already been taken. Out of six coaches, three will have motors, and they will cost Rs. 8 crores. The coaches without a motor will cost Rs.4 crore. Additional coach to carry luggage will also be included.

Gadkari mentioned that it takes around two-and-half hours to reach Amravati from Nagpur. Metro will cover the distance in one hour and 15 minutes. It will have both business and economy class matching the global standards. He said that he is also holding meetings with the Metro team and Vidarbha Industries Association in coming days. He has also invited travel and tourism companies for the meeting.

If the project becomes popular people will prefer Metro over road transport, and it will become the first public-private investment for Nagpur. As the system will use the already-existing broad gauge, the cost will be much less. Some of the undergoing projects in India are first in the world.

The farmers’ protests

While talking about the ongoing farmer’s protests in the national capital for over a month, Gadkari said that India has surplus grains. There was a time when India had a shortage of food grain, but at this time, we have around 280 lakh tons of rice in the godowns, which is sufficient to feed the entire world. The MSP is much higher compared to the market price, which, according to Gadkari, is another problem.

He said that last year we exported 60 lakh tons of sugar with a subsidy of Rs.600 crore. While the price of sugar in the international market is Rs.22 per KG, the government paid Rs.34 per KG for the sugarcane. This price difference is the problem. He mentioned that he has been talking about producing ethanol from the surplus food grains, but the permissions were not granted.

At present India is importing fuel worth Rs.8 lakh crore. One ton of rice can be converted to 480 liters of ethanol, and one ton of corn can produce 280 liters of ethanol. If the permissions are given for the production of ethanol, the economy in Bihar and UP will change drastically. The sugarcane juice and molasses will be used to produce ethanol instead of sugar.

Gadkari said that he has launched scooters and bikes by Bajaj and TVS that run on ethanol. A lot of products can be made with it, including biodegradable bio-plastic. It can help in increasing farmers’ income and substantially reduce pollution. The money that India spends on importing fuel can remain in India and bring more profit to the farmers.

Gadkari said that the Indian government is working for the benefit of the farmers and increasing MSP every year. He said it is sad to see Akali Dal left alliance over the laws that were already discussed in the parliament in June. The government is ready to talk and making all efforts to resolve the situation, and hopefully, it will get resolved soon. 

Support for MSMEs

Gadkari said that in May, Rs.3 lakh crore were sanctioned for collateral-free loans for MSMEs. 2 lakh crore have already been sanctioned and disbursement of the loans stands between Rs.1.6 lakh crore to 1.8 lakh crore. He had requested the Finance Minister to give more relaxation in the scheme. He said as urban cooperative banks and Non-Banking Financial Companies (NBFCs) have also financed MSMEs, they must be brought under the scheme that will further help the sector.

As of now, the government has granted Rs.20,000 crore for distressed MSMEs. Around six lakh MSMEs’ debt was restructured under it. Rs.50,000 crores of equity support was provided for MSMEs under ‘fund for funds’ scheme, and it is under process. Those MSMEs that have good export turnover, tax return, GST and bank records will be able to tap the capital market. The government will provide them with 15 percent equity infusion and rest they can get from the market.

The government has also launched a portal called ‘Champion’ for addressing problems raised by MSMEs. As MSMEs account for 48% of the exports of India and have a 30% contribution in GDP, the government is taking all steps to help them revive and flourish. The aim is to improve export percentage to 60% and GDP contribution to 40% in the coming years. The MSMEs sector provides 11 crore jobs at the moment and will be able to provide five crores more jobs with an improved flow of liquidity, he asserted.

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