Economic analysis of bio-fuel policy of Chhattisgarh.

Abstract

Government of Chhattisgarh has taken unique initiative for development of bio-fuel in consonance with government of India. Bio-fuel production in state can effectively increase employment, improve economy of rural area, reduce dependence on oil imports and minimize pollution. This paper tries to analyse the economic feasibility of biofuel policy of Chhattisgarh which has enormous renewable resources with immense potential of tree borne oil species. To analyse the parameters of bio-fuel policy, official documents and data pertaining to plantation, carried out by different agencies involved in bio-fuel programme, were collected. Alternative plans were worked out using criteria of survival of plantation carried out by different agencies. The survival rates were considered in the proportion/percentage of total plantation (i.e. 100%, 75%, 50% and 25% respectively). Similarly recovery of oil from one kg of seed was worked out in the scale of 25%, 30%, 35% and 40% respectively. This study suggested that the best option will be to ensure 100 per cent survival of plantation with 40 per cent oil recovery in per kg seed. The paper concludes that the success of biodiesel greatly depends on oil percentage in seeds as well as survival percentage. Therefore a targeted research programme should be launch giving a clear mandate and targets to research institutes. Government may develop a long term programme to involve local community under SHGs or informal group structure. Minimum support price for seed should be determined on the base of oil percentage. The bio-fuel development, incentive should be given in form of subsidies, tax relief, insurance to the entrepreneurs involved in pre and post harvest processing.