Union Minister Nitin Gadkari on Monday said there was a need for players in the alternative fuel sector to be extended priority sector lending. The minister said he would discuss the issue with Finance Minister Nirmala Sitharaman and the Reserve Bank of India (RBI).
As green energy is in a nascent stage, the financial strength of entities in this space is limited. Gadkari said they found it difficult to compete with the petrol and diesel sector, which has deep pockets. Under the RBI’s priority sector lending, banks are required to extend smooth credit at lower interest rates to sectors considered as a priority.
Gadkari also called on players in the alternative fuel sector to stop operating in silos and push forward for green energy transition as a collective if they want to be competitive against the internal combustion engine (ICE) vehicle sector.
“Some players think of electric vehicles (EVs), some are in the biomass space, and some are concerned with the sugar industry. This way, there are different compartments in operation. If you all (barring petrol, diesel, and gas) can come together under the banner of alternative fuel and present a forward-looking road map, it will be beneficial for everyone,” the minister said at an event.
He said the sector didn’t have the privilege of competing internally when it’s at such a nascent stage. “If all of you exert even 20 times the strength you are right now, bringing down the imports of petrol and diesel will be difficult even then,” he told the industry.
Automobiles are a Rs 7.5-trillion sector, a large majority of which is dominated by petrol- and diesel-run vehicles. While alternative fuels are more cost effective, supporting infrastructure for vehicles running on them is not adequate yet, he said.
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