Gadkari offers priority sector loans to alternative fuels players
Union Minister Nitin Gadkari on Monday said there was a need for players in the alternative fuels sector to benefit from priority sector loans. The minister said he would discuss the matter with Finance Minister Nirmala Sitharaman and the Reserve Bank of India (RBI).
As green energy is in its infancy, the financial strength of entities in this space is limited. Gadkari said he finds it difficult to compete with the gasoline and diesel sector, which has deep pockets. Under the RBI priority sector lending, banks are required to extend smooth credit at lower interest rates to sectors considered to be priority.
Gadkari also called on players in the alternative fuels industry to stop operating in silos and advance the green energy transition as a collective if they are to compete against the internal combustion engine (ICE) vehicle industry.
“Some players are thinking about electric vehicles (EVs), some are in the biomass space, and some are concerned with the sugar industry. In that way, there are different compartments in operation. If you can all (at the (except petrol, diesel and gas) unite you under the banner of alternative fuels and present a forward-looking roadmap, it will be beneficial for everyone,” the Minister said during a event.
He said the sector does not have the privilege of competing internally at such a nascent stage. “If you all exert even 20 times the force you are currently exerting, it will be difficult to reduce gasoline and diesel imports,” he told the industry.
Automobiles is a Rs 7.5 trillion sector, a large majority of which is dominated by petrol and diesel vehicles. Although alternative fuels are more cost-effective, the supporting infrastructure for vehicles using them is not yet adequate, he said.