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‘Biomass energy units can boost industrial growth in Bihar’

According to reports, Bihar has a good potential for setting up biomass-based energy generation plants as paddy husk and other biomass are available in plenty in the state.

Setting up of these plants, in turn, could give a boost to establishment of industries in the state. According to figures provided by the Bihar Renewable Energy Development Corporation (BREDA), Bihar could very well generate about 200MW power through biomass-based units.

Bihar’s industrial policy is tailored to give a fillip to setting up of these plants as it provides for 60% subsidy for purchase of plants and machinery for setting up captive biomass energy generation plants for industries.

State industries minister Renu Kumari Kushwaha said the record production of paddy with application of Srividhi scheme has created opportunities for use of husk in biomass energy plants having a capacity of 2MW or more. Tapping of biomass energy generation potential can help run several industries, she said.

Moreover, she said, if Bihar is granted special status by the Centre, under which 20% tax holiday on excise duty and income-tax is given for 10 years to new industries, it will attract hundreds of industries to the state.

Bihar Industries Association (BIA) president KPS Keshri and its former secretary general Sanjay Goenka shared the minister’s view. They said the industries coming to Bihar would have the option of setting up their own captive biomass energy generation plants, for which the state government is providing subsidy.

Keshri said the grant of special status would set in motion the process of industrialization in Bihar and the BIA was already in dialogue with the state government for formulating a plan for setting up of private industrial areas with the state government’s support for creation of infrastructure. Goenka said a 3MW biomass energy plant using paddy husk has already been set up by a new paper unit near Giddha industrial area in Bhojpur district. The industries minister added that many rice and sugar mills had set up biomass energy generation plants of two to three MW capacity.

An industry department official, B Mishra, said the Siddheshwar rice mill, Buxar, has launched an industrial project worth Rs 52 crore with a 2MW captive biomass generation plant.

One comment

  1. In the name of special status, why pay free equity and no taxes through Accelerated Depreciation?? Kindly look at the pathetic situation of Subsidy regime and Accelerated Dep, which is derailing Country’s economy with Free gift of entire plant to the Project Promoter, yet, no control on raw material…..

    Solar PV, Wind (now only GBI good), Biomass power projects should not be promoted with this present regime of Capital subsidy (or Viability Gap Funding) and Accelerated Depreciation which is detrimental to the Economy and Government and hence Common Man….

    a). Assume that with the present Capital Subsidy and Accelerated Depreciation policy,a total of 4000 MW of Biomass or Solar PV Power Projects are executed in INDIA till date. Assume the Project cost of Rs. 6.5 Cr/ MW.

    So, the Total money invested with 4000 MW Biomass or Solar PV with present policy = 4000 x 6.5 cr/MW = Rs. 26,000 Crores.

    b). Capital Subsidy (or Viability Gap Funding) doled out at rs. 1.5 cr/MW (20 to 30%) = 4000 x 1.5 = Rs. 6000 Crore. (if 30%, then it will increase to rs. 1.95 cr/MW = 7800 Cr)

    c). Loss of Tax collection from these project owners and hence loss to Government exchequer due to Accelerated Depreciation at 80% on Project investment ( policy advantage to Entrepreneurs, but, who cared for Government or People!) = 0.8 x 4000 x 6.5 = Rs. 20,800 Crore !!

    d). Loan received by these Project owners (30:70 Equity:Debt) = Rs. 4000 x 0.7 x 6.5 = Rs. 18,200 Crore from IREDA or Banks.

    e). Total Loss or Cash outflow to the government = 6000 + 20,800 = Rs. 26,800 Crore, i.e 800 Cr more than the total investment, which Government could have OWNED these project on their own as the total investment is only rs. 26,000 Crore (refer item a), but, the property is on these pseudo investors (or tax saver’s) NAME?? Is this Policy making or Democracy?? How Can a Government Policy allow the transfer of Public property to the private people, that too as a reward for NON TAX PAYERS through AD?

    Please note that If GOVERNMENT would have created the Entire 4000 MW of Biomass or Solar PV Capacity, it would have required ONLY 30% of 26,000 Crore i.e Rs. 7800 Crore (as equity rest through International debt funding like kfw etc), which they could have easily managed from the Taxes collected from Rs. 20,800 Crore (which was doled out free through Accelerated Depreciation) which is not good and we should stop such errant policy making which also created liability in addition through NON LOAN RECOVERY.

    f). Further, many of these Project Promoters have not PAID the loan and are asking for Support for increased tariff, low cost Working Capital, non functioning of Plants, no job creation despite loss of Rs. 26,800 Crore to Government and NO POWER GENERATION hence, is this not a Crime and why Government is keeping silent on these Project Promoters whose plants are not Functioning….. We are ok with the Project Promoters who are running the plant with the desired load (as per the DPR, few are run with under load and must be punished too)….

    I did write to the Government to create large number of small, new and first generation Entrepreneurs with Mentoring with a learned business plan with financial number and such sample can be seen at for the Benefit of INDIA:

    This can be practised in USA, Europe, Arab Spring Countries, wherein we can use the Youth Energy for the best cause with learned business plan with financial numbers, with FUNDING, Mentoring, Control Stakes till the debt and equity recovery and also to offer low cost renewable energy.

    Yesterday in a TV program called “Right To Be Heard”, Justice Katju (Ex-CJI India, now Chairman of Press Council of INDIA) firmly stated that 90% of INDIANS are FOOLS and they do not care for the country and poor people will never be respected.

    Supreme Court did direct the government to relook in to the 2G policy and made errants to pay back, why not Justice Katju write to the President to rectify these errant policies made by 10% Intellectuals to FOOL 90% Indians??

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