Our Electric, Hydrogen & Flex Industries Will Become Number One in the World
is considering a cut in the goods and services tax (GST) rate on fuel blends with higher ethanol content,
Nitin Gadkari
, minister for road transport and highways, said at an ET Roundtable in New Delhi on July 17. He added that this will encourage greater adoption of vehicles that run on 100 per cent ethanol, which will help reduce India's fossil fuel imports, cut down on pollution and make the country self-reliant.
The minister said his intent is to achieve the daily award of 100 km of national highways, compared with the average of 23 km in FY24 or 46.7 km in FY18, the highest so far. Edited excerpts:
Question: Who is going to be the next president of the Bharatiya Janata Party (BJP)?
Nitin Gadkari: Your question is right, but the person is wrong. Only the president of the BJP can answer this.
Question: Are there differences between the RSS and the party about the position of president?
Nitin Gadkari: I have no idea. All talks are within the party. Maybe Mr (JP) Nadda will be able to tell.
Question: Will the next president be someone who has been general secretary?
Nitin Gadkari: I don't know. If I knew, I would have told you.
Question: Are you okay with the alliances in Maharashtra?
Nitin Gadkari: Politics is a game of compromises, compulsions, limitations and contradictions. The distance between ideal politics and practical politics is increasing. There is deterioration everywhere.
Question: The people you attacked for corruption are with you today.
Nitin Gadkari: I told you that there are no permanent enemies in politics. And as the situation evolves, people keep adapting.
Question: There has been a backlash against ethanol being imposed on users. What is the current programme?
Nitin Gadkari: Initially, India needed surplus food grains. But now we have a problem of storing these surplus food grains. The second problem is that our minimum support price (
MSP
) is high, and the market price is low. That is why I have been working on a mission since 2004, which is the diversification of agriculture towards the energy and power sector.
Today we are importing fossil fuels worth ₹22 lakh crore and our energy dependence is at 85 per cent imports. Economically, this is a challenge. Besides, transportation accounts for 40 per cent of air pollution.
On the one hand, there is an economic as well as environmental problem and, on the other hand, the share of agriculture in our GDP is just 12 per cent compared to 20-24 per cent of the manufacturing sector and 52-54 per cent of the service sector.
Due to the high levels of unemployment, poverty and starvation in the rural and agriculture sector, a huge part of our population has migrated and urbanised, which in turn has led to a lot of problems for towns like Delhi, Mumbai, Kolkata and Chennai.
I think it is time to increase the share of agriculture in the GDP from 12 per cent to 24 per cent, and the best way to do this is to reduce the import of fossil fuels and move towards converting surplus food into fuel.
Question: How will this ecosystem develop and help India?
Nitin Gadkari: We are working towards converting surplus food to fuel. Currently, we are using E20 which is a fuel blend of 20 per cent ethanol and 80 per cent gasoline. We are now exploring to increase it to 27 per cent and eventually 100 per cent ethanol fuel that can completely replace gasoline.
This can be done through flex engines. Now, 11 companies including Tata Motors, Mahindra & Mahindra,
Toyota
India and Hyundai Motors, among others, have started (working on) this flex engine.
Even two-wheeler makers like Bajaj Auto, TVS Motor, Hero Moto and Honda all are working on 100 per cent ethanol motorcycles.
Besides, work is on to blend 10 per cent isobutanol with diesel for commercial vehicles and develop ethanol-run generators as well as other agricultural equipment.
India's automobile industry is growing at a fast pace. We are now the third largest at ₹22 lakh crore behind China (₹49 lakh crore) and the US (₹78 lakh crore).
Now there is availability of electric, ethanol,
methanol
, bio diesel, bio energy and hydrogen which can serve as environment-friendly and cost-effective replacements for gasoline.
We have also started work on using bamboo in thermal power plants as an alternative to coal as bamboo has high calorific value and produces less carbon dioxide compared to coal, which will help to reduce air pollution too. It will take some time to develop the ecosystem, but this will help to increase per capita income in rural India and the share of agriculture (in the GDP) from 12 per cent to 24 per cent, thus making us self-reliant.
Question: India's water table is decreasing, and we see water scarcity in certain parts of the country. How can we address this?
Nitin Gadkari: There is no water shortage in India. The way we made the power grid and the road grid, we need to make a water grid. There are 49 river connectivity projects in the country.
Every year, flooding causes damage worth ₹2-2.5 lakh crore. While north India has enough water, the problem is in states like Gujarat, Rajasthan, Maharashtra, Karnataka, Telangana,
Andhra Pradesh
, Chhattisgarh and parts of Odisha. I don't have the entire plan ready right now, but water availability is adequate in India. What we need to do is reduce flooding, increase water conservation through recharging ground water, and take surplus water from one basin to another.
Question: What is the impact of China's restrictions on India's automobile industry?
Nitin Gadkari: Our young population is very talented. We currently have four active areas of research. These are lithium ion, sodium ion, zinc ion and aluminum ion batteries.
Now the problem is that we are dependent on China for lithium ion batteries. But our people are doing such a good job that in two-three years, we will become self-reliant. Then we won't need it.
Besides, we are going big towards scrapping old vehicles. This will help us extract special metals like cadmium and recycle aluminium, rubber, plastics and steel.
Our electric industry, hydrogen industry, and flex industry will be number one in the world. In five years, India will be number one in the automobile sector.
Question: Is ethanol commercially viable compared to petrol? What can be done to increase the offtake of ethanol as a fuel?
Nitin Gadkari: Ethanol is being used in race cars around the world. I have got a patented technology from Russia, currently under trial in the
ministry of petroleum
and natural gas, to increase the calorific value of ethanol and bring it on a par with petrol.
There is a difference between ethanol and petrol.Ethanol costs between ₹54 and ₹65 with the average cost at ₹60, while the rate of petrol is now ₹120. So it is at half rate. So there is no difference in cost, taking into account fuel efficiency, whether a vehicle is run on petrol or on ethanol.
The second benefit of ethanol is it cuts our fossil fuel imports. Thirdly, pollution is reduced, agriculture gets benefitted and it boosts rural employment generation.
However, there is no adoption of higher ethanol blended fuels because of the 18 per cent GST rate compared to 5 per cent on fuel with up to 20 per cent ethanol. Besides, the difference in the calorific value of ethanol vis-a-vis petrol makes it unviable. It is not becoming popular due to the lack of economics. I presented this to finance minister
Nirmala Sitharaman
, and she informed me that the government could make it 5 per cent in the next GST Council.
Question: Will there be any benefit for carmakers under CAFE (Corporate Average Fuel Economy) 3 norms?
Nitin Gadkari: Extensive meetings have been happening on the issue at the highest level and there is a consensus that we need parity between electric vehicles and flexi engines. The old CAFE norms were electric-centric. The new norms will balance both flex and electric.
Different car makers are lobbying to protect their interests, but we will maintain the equilibrium keeping in mind the interest of the country. Pollution, cost, imports and benefits for agriculture will be taken into consideration when we firm up the norms.
Question: We have seen a slowdown in the award of contracts in the road sector. Why is that?
Nitin Gadkari: Earlier, road projects were awarded on the basis of acquisitions or availability of just 10 per cent of the land. Now, we have mandated the availability of 90 per cent of land with the developer, in the absence of which the appointment date is not assigned. Besides, getting environment and forest clearance is also a requirement. Now, we award the project only when everything is clear.
My project award rate has been 38-40 km. Now my intention is to do 100 km per day. This is not my declaration, it is my intention. Neither is it a political declaration. It is a target for our ministry. I will take it to 100 km.
Question: Many existing car buyers in Delhi are worried about changing emission norms. What is your take on it?
Nitin Gadkari: Technology keeps changing. This is a universal process and happens everywhere. We have to keep pace with the world.
Earlier, when we had proposed Euro VI emission norms, there was pressure from multiple stakeholders. After several meetings, one day I said you have to go from Euro IV to Euro VI. Everyone adopted it after a lot of anger and resistance. Today, it is being successfully implemented. Currently we are on Euro VI norms but the world is moving towards Euro VII. We want to be at par with European nations, so we are preparing for it.
Question: What are your plans regarding asset monetisation in your sector?
Nitin Gadkari: There is no shortage of money. We have multiple models including the engineering procurement and construction (EPC), the build-operate-transfer (BOT) and the hybrid annuity model (HAM).
Soon, even toll barriers will be removed. The toll will be deducted from your bank account based on your entry and exit. You don't have to stop anywhere. When I switched to FASTag, toll income increased by ₹10,000 crore. Going forward, when I remove the toll barrier, it will further increase by ₹10,000 crore. In last two years, toll income was ₹1,40,000 crore.
If I monetise my project, banks and investors will queue up for it. The InvIT model, when introduced, was oversubscribed by seven times in the first seven hours. There is no shortage of money. When you invest in the InvIT model, I will give you over 8 per cent return.
Question: Road safety has been an issue in India. What are the measures being explored?
Nitin Gadkari: When I asked automakers to install six airbags, they opposed it. India had set standards for the New Car Assessment Programme (
NCAP
), which was initially opposed. Now, all the small cars in the world are coming to India for testing and all auto makers are competing among themselves to develop the safest cars.
Besides, we are putting in place the bus code and truck code that will be at par with international standards, aimed at enhancing road safety. I am not going to compromise with road safety and people's lives.
Question: Despite multiple efforts, road accidents have been on the rise. What is being done to address the problem?
Nitin Gadkari: We haven't succeeded in curbing highway accidents as much as we wanted. This is our only dark area. Every year, there are 5 lakh accidents and 1.8 lakh deaths in India. The 18-34 age group accounts for 66 per cent of deaths. We made two rules: if there is any road accident and people take the victim to a hospital, then they will be called Rah-Veer and be awarded ₹25,000. Secondly, wherever the accident occurs (state road or NH), hospital expenses (up to ₹1.5 lakh) for first seven days will be borne by government.
We did a study which showed that if people are rushed to the hospital immediately, then 50 per cent of lives will be saved.
We also came up with a new order that if one buys a two-wheeler, then the company will give two helmets of ISI standard. We made six airbags mandatory in cars.
In road engineering, detailed project reports (DPRs) made a lot of mistakes. We found black spots worth ₹40,000 crore. We are making improvements now. We have also decided to create tall dividers to avoid accidents as people jump and cross roads. We are also introducing road safety courses. But society needs to follow traffic rules. We are also working on creating air strips on roads to help accident victims by airlifting them from the site of accident, if needed.
Question: The quality of road construction is questioned time and again. Where is the problem and how can it be fixed?
Nitin Gadkari: Initially, I was building roads from concrete. But cement companies raised rate of concrete, and I moved to bitumen. Now, bitumen and water are not friendly and since our drains are not of good quality, holes come up on roads or broken patches develop.
From now on, the drains will be precast. So, if water flows and does not lock up, there will be no damage to our roads. We are adopting the best practices available worldwide for developing our national highways. We have also made changes in detailed project report, aimed at attracting good people who may charge 4 per cent extra but not compromise with quality of construction.
There is an earlier fault of mine that I am now trying to fix. There used to be 15-20 companies working with the
National Highways Authority of India
(NHAI) and I felt they were making a cartel. So, I made technical and financial qualifications liberal. As a result, 350-400 companies qualified for road construction, but the quality got compromised. I shouldn't say this but where horses used to qualify, donkeys too became eligible to bid. So, I backed out and reversed my decision.
Also, the earlier practice of awarding the project to the lowest bidder has been done away with and hopefully it will address the problem to some extent.
Question: What are your views on welfare politics as many state governments have started announcing schemes before elections?
Nitin Gadkari: This is a competition, but people have to decide. I am also a member of parliament, but I told my people, if you want to vote, you vote, if not, then don't. I will work regardless of whether you vote or not.
We need to redefine the meaning of politics. Power politics is not politics. Working for the society is politics. My ambition is to work for society. I did not put up any posters but I still got votes. If you do good work, you get support. I tell my colleagues that people's trust and love is your political capital.
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