AIDA July 2020 Issue

JULY 2020
Vol: XX Issse:7
Price : `350/- Per Issue+G.S.T. l Pages 76
ALL INDIA DISTILLERS’ ASSOCIATION

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AIDA News Letter July 2020 3

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4 AIDA News Letter July 2020

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PRICE LIST

APPEAL

ETHANOL
Sugar Factories See Ethanol Output Doubling in 2020-21
Increase in cane area to push up production to over 375 crore litres in next season
Better water availability and increased acreage are expected to come f rom them during the
under sugarcane cultivation will make it possible to remainder of the current season, which ends on
produce 375-400 crore litres of ethanol in 2020-21, November 30.
more than double of 170 crore litres that sugar mills
“The diversion will not only reduce surplus sugar
and distilleries promised to supply for the ethanol-
availability in the country, but also reduce the
blending programme (EBP) this season, the Indian
carrying costs to that extent for the sugar mills. It
Sugar Mills Association (ISMA) said on Monday.
has and will also give better returns to mills because
W ith this exp ected increase in ethanol ethanol prices fixed by the government 1 are more
production, the government is targeting an ethanol remunerative than sugar currently, as also give them
supply of 300-350 crore litres, enough to achieve better, cash flows because of immediate’ sale of
7.5-8 per cent ethanol blend levels with petrol in the ethanol as compared to delays in sale of the
the coming ethanol season, which commences sugar, which could have been stuck in godowns of
from December 2020 and runs till November 2021, mills for more than 10-12 months,” the sugar
it said. industry body said.
Contracts with OMCs It said that despite the fall in petrol consump-
This season, ethanol manufacturers and sugar tion sales during the lockdown period, supplies of
mills have entered into ethanol supply contracts with ethanol were not too badly affected.
oil marketing companies (OMCs) for 170 crore litres,
It req uested the g ov ernment to increase
of which 92.5 crore litres have been supplied till
blending levels to 15 percent in and around the
June 22, helping achieve an average all India
States where surplus ethanol production happens.
blending of 5.09 percent. The blending levels
achieved in some States, including Uttar Pradesh, Similarly, it said OMCs should pay the same
Haryana, P unjab , Uttarakhand, Bihar and transportation charge that they charge petrol
Karnataka, are much higher and ranged between stations for canying fuel to ethanol manufacturers.
8.5 per cent and 9.8 percent, ISMA said. In many cases, ISMA alleged, the transportation
charge paid by OMCs is `4-`5 lower per litre.
Significantly, many sugar mills will produce 8
lakh tonnes less sugar this year as they diverted B- It also said that the States such as Delhi and
heavy molasses and cane juice away from sugar Rajasthan wrongly charge import fee on ethanol
production. While ethanol produced from B-heavy being supplied to depots located in their jurisdic-
molasses and cane juice accounted for 58 crore tion, while some other States control the movement
litres in the total supply so far, another 23 crore litres of ethanol. BUSINESS LINE
Mills Look to Tap Molasses Export to Boost Cash Flow

Against the backdrop of a bumper sugarcane sugar sector amid demand supply volatility.
harvest and an estimated sugar output of 30.5 Molasses is a cane by product generated during
million tonnes (mt) in the next crushing season, mills sugar production. Its recovery is pegged at 4.75 per
are looking to tap export of molasses to improve cent of cane crushed. It is processed to make ethyl
cash flow and provide additional stability to the alcohol and methyl alcohol. While ethyl alcohol is

ETHANOL
unfit for human consumption, methyl alcohol is used (October-September) or till surplus sugarcane is
for making liquor by distilleries, besides other produced. The exports could occur without any
pharmaceutical uses. Molasses is also processed financial burden on the government and yet allow
to make ethanol, which is mixed with fuel under the the use of more B-molasses and cane juice for
central policy. ethanol, in stead of f or sug ar p ro duction, it
suggested. .
Molasses is in high demand in several countries,
including South Korea, Vietnam, Europe, and West An executive with a leading UP-based sugar and
Asia for different industrial applications, including ethanol producer said free movement of molasses
cattle feed and inflammable products. would directly translate into more cash flow for mills.
“Since molasses is highly demand-supply sensitive,
Since molasses is a state subject, respective
f ree m ov e m ent of the com m od ity m akes
governments enjoy jurisdiction on its interstate and
commercial sense in the present context, more so
international movement.
when we are staring at another excess season of
Conceding to the demand of the industry, the sugar output due to higher acreage and yield
Maharashtra government on Monday allowed estimates.”
molasses export to other states and countries.
In UP the country’s top sugar and ethanol
“There was a ban on the export of molasses producer the controlled prices of molasses is about
from Maharashtra till September 30. The state has `120 per quintal (100 kilos), which is 50 percent
issued a government order, allowing its export,” higher, compared to `80 per quintal last year, UP
National Federation of Cooperative Sugar Factories Sugar Mills Association Secretary Deepak Guptara
Manag ing Director Prakash Naiknav are told said.
Business Standard.
In the current sugar season, the molasses
“In the current season, nearly 300,000 tonnes production in UP stood at more than 5 mt
of molasses have been exported from Uttar Pradesh
Meanwhile, ISMA on Monday said ethanol
(UP), Punjab , Karnataka, and Haryana. W ith
supply contracts for 1,700 million litres (ml) have
Maharashtra getting on the bandwagon, the state
been entered into between ethanol manufacturers/
can also contribute to 250,000 tonnes of exports
mills and oil marketing companies (OMCs) for the
in the coming months,” All India Sugar Trade current ethanol supply year (December-November)
Association Vice Chairman Rahil Shaikh informed, 2019-20.
adding international prices are now at $120 per
Against this, 925 ml has already been supplied
tonne.
to OMCs between December, 2019 and June 22,
In the wake of expected glut in molasses next 2020, achieving an average all-India blending of
year, the Indian Sugar Mills Association (ISMA) had over 5 percent.
recently urged the Centre to facilitate export of C- BUSINESS STANDARD
heavy molasses in the 2020-21 sugar season

ETHANOL
Rice Output Could Hit Record High
Farmers expanding area under paddy
India’s rice production is likely to surge to a tonnes of rice in 2019/20, has started planting the
record high as farmers are expanding the area under summer-sown crop as the monsoon has spread to
paddy because of good monsoon rains and after main rice-growing areas in the south and east. The
the government raised the price at which it will buy good monsoon rain and rising exports due to a rally
the new-season crop. in global prices have been encouraging Indian
farmers to plant more rice, said Nitin Gupta, Vice
Hig her output by the world’s biggest rice
President for Olam India’s rice business.
exporter could dampen domestic prices and make
exports more competitive, compensating for lower Rice prices in Thailand and Vietnam, the second
supplies from rivals Thailand and Vietnam. It could and third biggest exporter of the grain respectively,
also force India’s state-run agencies to ramp up hit multi-year highs this year due to limited supplies.
purchases from farmers even as inventories are Unlike its competitors, India has a massive surplus
bulging. for export and it will get bigger in the new season,
Gupta said.
“Farmers are interested in rice. They are likely
to expand area due to government support. In the State run agencies were holding 27.4 million
new marketing year, we could produce as much as tonnes of rice and another 21 million tonnes of un-
120 million tonne,” said B. V. Krishna Rao, President milled paddy, according to Food Corporation of India
of India’s Rice Exporters Association. (FCI). But another record harvest could dampen
domestic prices and force the FCI to buy nearly half
The government raised the price at which it will
of the output from farmers, said Rao.
buy new season rice from farmers by 2.9%.
FINANCIAL EXPRESS
India, which produced a record 117.94 million

SUGAR
47 Lakh UP Sugarcane Farmers Got `1 Lakh
Crore in Last Three Years
Over 47 LAKH sugarcane farmers in Uttar previous government has paid this much amount
Pradesh have been paid a record cane price even during its 5-year tenure”, he said.
payment of more than `1,00,000 crore between
Interacting with the farmers through video
2017-2020.
conf erencin g at an ev ent org ani zed b y the
This was announced by Chief Minister Yogi department of Sugar and Cane Development, the
Adityanath here on Friday while making DBT chief minister said that the state government is
transfer of `418 crore directly to farmers accounts. committed to protect the economic interests of cane
farmers.
“This cane p rice paym ent of m ore than
`1,00,000 crore paid to the cane farmers in the last “Even during the corona pandemic, when all the
three years since the BJP government came to industries were facing closure, the sugar mills of
power, is `46,633 crore more than the combined the state continued crushing operations. It was the
cane price payment of `53,367 crore paid in the commitment of government for safeguarding the
previous 3 years of 2014-17,” he said, adding that interest of f arm ers, that the supp ly of their
this cane price payment is also `4,78 5 crore more sug arcane rem ains uninterrup ted during the
than the cane price payment of `95,215 crore paid lockdown period. Though the sugar sale remained
during the f iv e year tenure of t he p rev ious negligible during the lockdown, but in spite of that,
Samajwadi Party government from 2012-2017. cane price payment of `5,953 crore was made to
farmers in this period,” he claimed.
Stating that his g overnment is constantly
working to double the income of farmers, he said it Giving details, he said that in the current
has been the government’s commitment to pay crushing season of 2019-20, the sugar mills of the
every penny of the sugarcane farmers. “The last state crushed 1,116 lakh tonne of sugarcane and
three years and three months have been a golden produced 126.5 lakh tonne of sugar. The cane
period in the history of Uttar Pradesh’s sugar crushing and sugar production is the highest
industry when such a huge amount is being paid recorded in the history of state,” the chief minister
directly to the farmer’s account through DBT. No added. FINANCIAL EXPRESS
Sugar Prices in Maharashtra Firm Up by `100

Per Quintal on Reports of MSP Hike
Sugar prices in Maharashtra have firmed up by anticipation among traders about a possible rise in
around `100 per quintal over the last 10 days amid MSP by `1-2 per quintal.
market speculations of the Centre announcing a “Food secretary Sudhanshu Pandey last week
possible rise in the Minimum Support Price (MSP). stated that the government is considering a proposal
The current MSP of sugar stands at `3,100 per to increase the MSP of sugar from `3,100 per quintal
quintal. in order to help millers clear fair and remunerative
price (FRP) dues of about `22,000 crore to farmers,”
Mukesh Kuvediya, secretary general, Bombay
he said.
Sugar Merchants Association (BSMA) said that
prices have firmed up by `100 per quintal due to The Niti Aayog recently recommended a rise in

SUGAR
MSP to `3,300 per quintal while industry body Indian all industry sectors is slowly picking up with
Sugar Mills Association (ISMA) has suggested that restaurants commencing home deliveries and
MSP be raised to Rs 3,500 per quintal to `3,600 migrant workers coming back to work, he explained.
per quintal, he said.
Demand from the beverages and ice cream
The demand for a rise in MSP has also picked sector is still to pick up with the onset of monsoon,
up with the Commission of Agricultural Cost and he added.
Pricing (CACP) recommending a `100 per tonne
The industry, however, has begun stocking up
rise in FRP.
in anticipation of the hike in MSP, he said.
Maharashtra cooperative mills have sought a
Kuv ediya f elt that since the international
grade-wise rise in MSP to counter the dominance
sentiment is weak, sugar millers would prefer to
of mills from Uttar Pradesh that have captured the
focus on the domestic market rather than export
entire market.
sugar. The government has allocated a quota of 60
The mills are seeking `3,450 per quintal for S lakh tonne for export in the next three months.
Grade, `3,600 per quintal for M Grade and `3,750
Mills are presently honoring contracts that have
per quintal for L Grade.
been signed earlier, he said.
Ex-mill prices in Maharashtra for S-grade are
As per market reports, contracts worth 51 lakh
currently at `3,160-`3,210 per quintal and `3,250-
tonne have been signed by millers of which around
`3,380 p er q uintal f or M Grade in Kolhapur,
46 lakh tonne have already been shipped out.
Kuvediya said.
FINANCIAL EXPRESS
With the easing of the lockdown, demand from
Sugar Production for 2020-21 Season Estimated at 30.5 MT: ISMA

Sugar production for the ensuing sugar season sugar season’s cane area of around 48.41 lakh
of 2020-21 (October 2020- September 2021) has hectares. The increase in acreage and the expected
been estimated at 32.013 million tonne (mt). This is increase in sugarcane production was discussed in
assuming normal rainf all and other optim um ISMA’s m e eting on Thursday, w herein
conditions during the remaining period, said apex representatives from sugar-producing states from
body Indian Sugar Mills Association (ISMA) on across the country were present.
Thursday.
The above preliminary estimation of 32.013 mt
After accounting for the reduction in sugar is based on total sugarcane expected to be crushed
production due to diversion of cane juice and B- by sugar mills in the 2020-21 SS. However, since a
molasses to ethanol, it is estimated that sugar significant quantity of sugarcane juice and B-
production in the 2020-21 season will be at around molasses will be diverted into ethanol production,
30.5 mt, said an ISMA press release. a proportionate quantity of sugar production will get
Based on satellite images procured in the latter reduced. With higher availability of sugarcane and
part of Jun e 2020, the total ac reag e under surplus sugar production again in next year, it is
sugarcane in the country is estimated to be around estimated that a larger quantity of cane juice and
52.28 lakh hectares in the 2020-21 sugar season B-molasses will get diverted to ethanol, and that a
(SS), which is about 8% higher than the 2019-20 significant diversion will also happen in Maharashtra

SUGAR
and Karnataka, in addition to UP. in September, which will be considered in the first
adv ance estim ates that ISMA p repares then.
Accordingly, it is estimated that the diversion of
Therefore, after accounting for the reduction in sugar
cane juice and B-molasses to ethanol will reduce
production due to diversion of cane juice and B-
sugar production by 15 lakh tonne in next season,
molasses to ethanol, it is estimated that sugar
as compared to the 8 lakh tonne diverted this year.
production in 2020-21 will be at around 30.5 million
However, ISMA will get a better idea of this diversion
tonne, the press release said.
once the tenders happen and bids are given by
millers for ethanol supplies, which will be sometime FINANCIAL EXPRESS
Sugar Production Till March 15, 2020 Dips 21%

Sugar production till March 15 in the current of weeks. Experts say it is expected that fresh
sugar season (October-September) has declined buying from the mills may take place soon because
21% to 21.58 million tonne as against 27.36 MT in the pipeline would have largely dried up. That should
the same period last season. control sugar prices and buying should help the
mills.
According to reports available, sugar mills have
despatched almost 3 MT from their factories for For the period till March 15 in the 2019-20 SS,
export against Maximum Admissible Export Auantity 457 sugar mills started crushing operations as
(MAEQ) of 6 MT till March 15, 2020. As per market against 527 mills which operated last year, said
sources, as much as 3.6-3.8 MT have b een Indian Sugar Mills’ Association (ISMA).
contracted for exports so far. The current unprece-
As on March 15 this season, 136 mills have
dented situation due to outbreak of COVID-19 has
stopped crushing and only 321 sugar mills in the
also impacted the global sugar prices. However, the
country were operating as compared to 173 mills
impact could be temporary, the apex sugar body
and 354 mills, respectively in the last sugar season.
Indian Sugar Mills’ Association (ISMA) said.
In Uttar Pradesh, 119 sugar mills in operation
The fall in sugar production from Thailand to the
have produced 8.71 MT. It is estimated that UP will
tune of 5 MT as compared to last year and the recent
be producing similar quantity of sugar as was
decision of the Indonesian government to allow 600
produced last year at around 11.8 MT, ISMA pointed
ICUMSA sugar at a concessional import duty from
out.
India, Australia and Thailand, gives an additional
opportunity to India to export large quantities to In Maharashtra, sugar production till March 15
Indonesia. 600 ICUMSA sugar is a natural, high was sharply lower at 5.58 MTas compared with 10
energy food source made from the sugarcane. MT produced last year same period. The daily rate
of crushing in the current season is significantly
Indian raw sugar has a good chance of getting
lower than last year. In Karnataka, 63 sugar mills
exported to Indonesia. Hence, it is expected that
have produced 3.33 MT. Considering the daily
sugar exports from India will again pick up soon.
crushing and the special season in July-September,
The COVID-19 impact has also reduced sugar total of 3.4 MT is expected in the state. In Tamil
offtake from mills in the past 15 days or so. The Nadu, of 24 mills which operated this season, one
sweetener in the pipeline would have got sold in sugar mill has ended operations. Till March 15
the wholesale and retail market in the past couple production in the state was 4.12 lakh tonne as

SUGAR
compared to 5.54 lakh tonne by 32 mills on the mills have produced about 4 lakh tonne, of which
corresponding date last year. Gujarat has produced 11 mills have stopped crushing.
7.78 Iakh tonne with 12 sugar mills in operation.
FINANCIAL EXPRESS
Last year, 9.80 lakh tonne produced in the same
date. In Andhra Pradesh and Telangana, 18 sugar
Sugar Demand Reaches Pre-Covid Level: ISMA

Sug ar dem and has recov ered f rom the SWEET DEAL
destruction seen during the lockdown and has
• Demand from bulk sugar consumers like cold
returned to pre-Covid levels on a sharp increase in
drink and ice cream makers has revived
orders from cold drink and ice-cream makers to fill
• Pipeline inventory is getting filled, which had
their inventory and meet daily needs.
dried during the nationwide lockdown
This revival in demand comes despite the • Sugar sale this season is expected to be over
closure of roadside tea stalls, and with few sweets 25 million tonnes, despite demand destruction
shops, hotels and restaurants getting back to
some unsold inventory left. The government has
business.
extended the sales window for the May quota and
The demand resurgence has come as a relief has released 1.85 mt of monthly quota for June.
for sugar mills, which were struggling to pay cane Analysts believe that sugar mills will be able to sell
dues to farmers. With the minimum selling price their entire quota and a marginal quota carried over
(MSP) of sugar fixed at `31 a kg, at least 10 per from May by the end of this month.
cent lower than the cost of production, sugar mills
“With demand picking up, sugar sales in the
were focusing on off loading inventory. Hotels,
2019-20 sugar season (October to September) may
restaurants and catering seg ments (Horeca)
be at 25-25.5 mt, almost close to last year,”
consume around 20-25 per cent of output.
Government Considering Hike in
“With the lockdown getting relaxed, demand for
Sugar MSP
sugar started picking up from the beginning of May,
The Government is considering a proposal
and has now reached pre-Covid levels. Now that
to increase the minimum selling price (MSP) of
the country is in the unlocking p hase, and
sugar from `31 per kg in order to help millers
restaurants and malls are also being allowed to
clear cans dues of about `22,000 crore to
open, demand of sugar will rise further and mills
farmers, Food Secretary Sudhanshu Pandey
will be able to sell the entire quantity allocated in
said.
June,” said Abinash Verma, Director General of the
Indian Sugar Mills Association (ISMA). He said the measures being taken by the
government will ensure early clearance of
Until February, sugar mills were able to sell
substantial cane arrears to farmers. “We’ve
around 1 million tonnes (mt) of additional quantity
received views from state governments on the
this year which was nullified because of the demand
matter. Even Niti Aayog has recommended a
destruction during the lockdown.
hike. We are looking into the matter. We will take
Mills in north India sold their monthly quotas of a balanced approach in the interest of both
sugar in May, but west and south Indian states have farmers and consumers,” Pandey said.

SUGAR
said Verma. Sugar production was reported at 26.82 mt,
around 6 mt lower than the 32.75 mt reported at the
Sugar business contributes nearly 81 per cent
corresponding period last year.
towards mills’ top line, while distillation (ethanol)
and co-generation (electricity) constitute 12 per cent Isma estimates closing balance between 9.5-
and 7 per cent, respectively. 10 mt, which might rise to around 11.5 mt at the
end of current season.
“Mills in Uttar Pradesh are sitting on high
inventory due to bumper sugar production this year. Sugar mills were able to sign export contracts
Resumption in demand would help mills there off of about 3.5 mt, out of the total quota of 6 mt for the
load a portion of inventory,” said Vijay Banka, current season.
Managing Director of Dwarikesh Sugar Industries. BUSINESS STANDARD
Sugar Output Expected to Rise 12% in 2020-21 : ISMA

W ith the forecast of a bountiful monsoon, production was diverted. However, a clear picture
domestic sugar production is estimated at 30.5 of such diversion would emerge after bids are
million tonnes (MT) in the 2020-21 crushing season, placed by millers for ethanol supplies sometime in
which would be 12 percent higher than the estimated September.
production of 27.2 MT this season.
With an opening balance (OB) of 14.5 MT in
These projections have been made by the Indian October 2019, estimated sugar production of 27.2
Sugar Mills Association (ISMA) assuming normal MT, expected domestic sales of 25 MT and exports
rainfall and other ‘optimum conditions’. The pan of 5.2 MT during the current season, the opening
India cane acreage has been pegged at 5.23 million stocks in October 2020 has been estimated at 11.5
hectares (MH) in 2020-21, 8 per cent higher than MT.
this season’s cropped area of 4.84 MH.
Although, the OB in October 2020 will be 3 MT
Thanks to higher cane availability and surplus lower than the corresponding month last year, at
sugar production, it is estimated that a larger 11.5 MT it will be 6.5 MT more than the domestic
quantity of cane juice and B molasses will get requirement till fresh sugar supply hits the market.
diverted for ethanol production.
“With Thailand’s sugar production to further fall
In its report released on Thursday, ISMA next season, beyond the 6 MT dip in the current
projected that the diversion to ethanol will help season, there is an opportunity for India to export
reduce sugar production by 1.5 MT to 30.5 MT in sugar to Asian countries,” the ISMA report added.
the next season. This year 0.8 MT of notional sugar
BUSINESS STANDARD
GLENCORE SUGAR REPORT

Food Secretary says government considering Trust of India. He said that the government would
to raise m inim um sug ar p rice: India’s Food take “a balanced approach in the interest of both
Secretary Sudhanshu Pandey said on June 18 that farmers and consumers,” The MSP is currently at
the government is considering a proposal to INR31 (US$0.41) per kilogram. Pandey did not say
increase the minimum selling price (MSP) of sugar by how much the MSP will be increased, but a task
to help millers clear cane dues, according to Press force constituted by policy think-tank NITI Aayog

SUGAR
recom m ended a one tim e increase of INR2 increase in the MSP, citing two unnamed official
(US$0.026) per kg. News website Cogencis has sources.
already reported that India’s government an INR2 BUSINESS LINE
Sugar Mills Get a Breather as Maharashtra Lifts

Ban on Sale of Molasses
The Maharashtra government has lifted the ban tonnes (It) of molasses at the beginning of the 2019-
on sale of molasses to other States and countries, 20 crushing season. This year, mills have produced
as the decline in demand and production of liquor 24.10 It of molasses.
due to the lockdown has resulted in accumulation
The Indian Sugar Mills Association had issued
of molasses with mills. ‘ “Lifting of the ban will
an appeal saying that to reduce the glut in availability
Streamline the m olasses b usiness, w hich is
of m olasses in the m arket next year, State
stagnant due to the Covid-19 spread. Sugar mills
governments should allow and encourage export of
could sell their stock of molasses, which will solve
C-heavy molasses for at least one year in the 2020-
storage and pollution problems. Fanners dependent
21 sugar season, or till surplus sugarcane is
on mills will benefit if molasses get a good price,”
produced by farmers.
the State government’s resolution stated.
BUSINESS LINE
According to a report by the State Excise
Department, Maharashtra’s mills had 3.02 lakh
Maharashtra Mills Pay 97% Fair and Remunerative Price

Sugar mills in Maharashtra have paid 97 per Office states that 144 sugar mills crushed 550.13
cent Fair and Remunerative Price (FRP) to farmers tonnes of sugarcane. Mills had to pay `13,508.22
this year after the completion of the crushing crore as FRP to farmers, of which 97 per cent was
season. Mills paid an FRP of `13,449.56 crore while paid by June 15. About 107 sugar mills have paid
dues worth `358.66 crore are pending this season. 100 per cent FRP.
The data released by the Sugar Commissioner BUSINESS LINE
Maharashtra Sugar Output Forecast Revised to

60 Lakh Tonne this Season
Maharashtra seems to have its sugar production Due to flooding of sugar fields, production
estimates go wrong this time. The state’s sugar estimates in Kolhapur division were expected to go
production estimates have been revised to 60 lakh down by 30-40%. However, it was later realised that
tonne from 58 lakh tonne by the state sugar barring a couple of talukas, production was not hit
commissionerate with increase in sugar recovery in the rest of Kolhapur and this was only 10-15%,
rates reported by several mills in Kolhapur region. officials from the commissionerate revealed. Some
of the mills are still running and are expected to
Significantly, sugar mills from Kolhapur and
continue till the month-end, the officials said.
Sangli, which were affected by the floods during the
monsoons have reported 10 lakh tonne more from With more cane planted for the next season,
the given estimates, according to industry persons. sugar production is expected to rise in the coming

SUGAR
season as well and therefore mills are expected to Indonesia annually imports 35-45 lakh tonne
export more sugar this season to maintain stability sugar and is the second largest importer of sugar
in prices. Last year, sugar mills in the state were after China. Thailand is usually the main supplier of
allocated an export quota of 10.5 lakh tonne, of sugar to Indonesia which is currently facing shortage
which mills managed to export only 5.5 lakh tonne. of sugar resulting in high domestic prices. Of the
This season, Maharashtra has been allocated a 60 lakh tonne of MAEQs issued by the government,
quota of 18.50 lakh tonne of which 11 lakh tonne around 35 lakh tonne have already been contracted
has been exported. Arequirement of 1.15 lakh tonne which leaves another 25 lakh tonne of exports, he
has come from Indonesia this season. said. FINANCIAL EXPRESS
Uttar Pradesh Sugarcane Farmers Demand

Payment of `14,000 Crore Due This Season
Uttar Pradesh Chief Minister Yogi Adityanath’s to prepare the land for cultivation but also have to
claim that over `1 lakh crore has been paid to take care of their families. “For this, they need
farmers towards sugarcane arrears in the last three money in hand,” said Jitender Hudda, a fanner
years has sparked controversy with some farmers leader from Shamli in the State.
and their leaders urging the government to make
He also said the statement made by the CM did
arrangements for settling the cane payment due to
more harm to farmers.
them in the current season, too.
“With the news spreading far and wide, most
The CM sai d last m onth that since his
people thought that farmers recently received `1
government came into being in 2017, cane arrears
lakh crore in arrears. Farmers had tough time
worth `1,00,800 crore were deposited in the bank
convincing those who have given them inputs on
accounts of 47 lakh sugarcane farmers in the State,
credit, or owed money to, that the CM was talking
which he claimed was a record.
about the money given in the past. The fact is that
Many farmer leaders, however, argued that 47 lakh sugarcane farmers have to get over `15,000
more important is the dues still to be paid. They crore towards cane payment still,” Hudda said.
need it badly because farmers are also suffering
Sugar mills owned by the government have to
due to the lockdown.
pay farmers nearly 40 per cent of sugarcane arrears,
said VM Singh, National President of the Rashtriya
Pending Dues
Kisan Mazdoor Sanghatan. “The 24 sugar mills
“Sug ar mills still ow e sug arcane farmers
owned by the government bought sugarcane worth
`14,000 crore during the current season and an
`3,123 crore during the current sugar season. They
additional interest component of nearly `2300 crore.
have so far paid only `1,800 crore to fanners and
It is important for farmers to have money in their
still have to pay `1,280 crore towards cane payment
hands now as they need to meet the expenses of
Not to talk of the mills in the cooperative sector,” he
kharif sowing which is currently underway,” said
said.
Choudhary Pushpendra Singh, President of the
Kisan Kheti Sangh. No Rise in Cane Price
Adityanath government has not done anything
During the lockdown period, m ost f am ily
for sugarcane farmers in the State.
members who were working in urban areas have
returned home with no work Farmers not only have The sugarcane price was not raised even once

SUGAR
since he came to power. farmers are paid the old price,” he said.
“For the last three years farmers were selling A representative of sugar mills, on conditions
the cane for the same price `315 per quintal. Even of anonymity, said the arrears will be paid once mills
if adjusted for inflation of a nominal 4 per cent, the start selling sugar.
farmers should have got `358 per quintal. Moreover,
He added that sugar sales have slowly started
sugar mills are getting an additional 1 kg sugar from
picking up with the lifting of lockdown.
the same quantity of sugarcane. Even after all these,
BUSINESS LINE

LIQUOR
Wines as Expensive as Luxury Cars
Christie's Sale of fine, rare and sotired wines includes prized collectibles
After a visit to a private cellar in California in The auctions also present an opportunity for
1972, Michael Broadbent, the late critic who collectors in India, where wine has emerged as an
introduced fine wine auctions in Christie’s, described alternative investment option for a niche segment.
it as “perfection”! The owner of the cellar was
Nikhil Agarwal, sommelier and CEO of All
Benjamin Ichinose, a Japanese-American collector.
Things Nice, a consultancy firm specialising in
Ichinose was a US Army captain practising luxury wines and spirits, says the upcoming auctions
orthodontics in Yokohama, Japan, b ef ore he represent wines that have always been sought after
returned to the San Francisco Bay Area and began by the rich, both for consumption and investment.
a pursuit of wine with his wife. He would go on to
Bringing them to India is, however, not the
amass a collection of over 55,000 bottles mostly
preferred choice given the high duties imposed on
French, Califdrnian and German wines, port, sherry
wines. The customs duty alone stands at 150
and madeira. He also took care to find the choicest
percent. “So as an investment, the moment the wine
vintages corresponding to birth years in the family
reaches India, I have to pay that,” says Agarwal.
1929 (when Ichinose and his wife, Mayon, were
bom), and 1961, 1964 and 1965, dedicated to their Even if a buyer chooses to keep the wine in a
two daughters and son. bonded warehouse and not pay customs duty, he
or she has to eventually pay a high interest rate.
Christie’s New York departm ent has now
“You’d want to keep it in bond either because you
announced an upcoming auction of Ichinose’s
plan to re-export it or you don’t want to pay the duty
collection of fine and rare wines. The wines, 626
for the moment. But nobody is going to buy fine wine
lots in all, will go under the hammer, virtually, from
coming from India,” says Agarwal.
July 16 to 31.
Given the logistical hurdles of shipping to and
These wines from the celebrated connoisseur’s
storing wine in India, the preferred choice for Indian
collection are part of Christie’s f ine w ines
investors would be to rent a warehouse in Hong
department’s July sale calendar. Besides New York,
Kong, London or New York where the auctions take
there will be live auctions in Hong Kong, Geneva
place. There is comparatively little paperwork
and London. The bids open in Hong Kong on July
involved and no logistical difficulties.
12, and the global sales will feature more than 2,500
lots, including a vast selection of rare wines and The pandemic has throw n up inv estm ent
fine spirits estimated between $500 and $100,000. opportunities in sales, Agarwal adds, pointing out
that in the enprimeur or wine futures, which refers
The selection spans over 240 years, from a
to buying wine before it is bottled and when it is still
bottle of Madeira 1775 to Bordeaux 2015, says
in the barrel market this year, some leading Cru
Edwin Vos, the international head of fine wines at
Classe Chateaux have released their wines at a 30
the British auction house. At the heart of all sales
per cent discount compared to the year before.
are the Burgundy and Bordeaux wines, while Hong
Kong will also offer sake lovers a curated selection BUSINESS STANDARD
of the Juyondai brand.

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Online Home Delivery of Liquor Mooted in Punjab
Recently Punjab cabinet approved 2020-21 excise policy of Punjab, the government may introduce an online
platform for home delivery of liqour in Mohali city in consultation with all the retail licensees of the city.
The innovative idea of an online platform will Under the new excise policy, the excise duty at
not be made into reality if even a single licensee retail has been increased by ` 5 per bottle for
objects to this proposal. If the idea becomes reality, Punjab Made Liquor (PML) or country liquor ` 4
Punjab would become the first state of India to have per bottle for Indian Made Foreign Liquor (IMLF)
home delivery of liquor. and ` 2 per bottle for beer ` 4529.40 crore for the
In the new excise policy of Punjab, a target of state of Punjab.
`6250 crore revenue collection has been fixed for As per the new policy, the Ex-Distillery Price
2020-21. The anticipated collection for 2019-20 is (EDP) for fixed quota of PML has been fixed at
`5676 crore. `271.11 per case. Now, the retail licensee will be
Under the new excise policy, the excise duty at allowed to interchange his/her quota of PML, IMFL
and beer by up to 15 percent. The VAT paid on
retail has been increased by `5 per bottle for Punjab
imported (BIO) liquor is also to be adjusted in
Made Liquor (PML) or country liquor, `4 per bottle
additional fixed license fee and additional 12 percent
for Indian Made Foreign Liquor (IMFL) and `2 per
revenue requirement for renewal of licenses next
bottle for beer. The excise duty at wholesale will
year.
remain unchanged during 2020-21 for PML, while
for strong beer it has been increased from `62 to The new excise policy also has the provision of
`68 per bottle. permitting the licensee to carry forward unsold quota
of 2019-20 to 2020-21 at nominal transfer fee of
Under the new policy, existing licensees who
`25 per PL (for PML), `40/- per PL (for IMFL), `45/
attain 12 percent excess revenue over the Minimum
- per PL for imported foreign liquor, and for `10/-
Guaranteed Revenue (MGR), will be allowed
per bottle for beer.
renewal for the 2020-21 fiscal.
The number of retail vends have been retained
Under the Punjab’s excise policy for 2020-2021,
at last year’s level of 5835. Bottling fee on IMFL
the department would invite applications for renewal
has been increased from `1 per bulk litre to `1 per
of groups/zones of 2019-20 for the year 2020-21
bottle for EDP upto `650 per case, `1.25 per bottle
through a public notice. The MGR of each group/
for EDP `651-2000 per case and `1.50 per bottle
zone will be fixed 8 percent higher than the MGR of
for EDP above `2000 per case.
2019-20. `4850 crore is the MGR from retail vends
SPIRITZ
that is to be realised during 2020-21. In the current
fiscal it is `4529.40 crore for the state of Punjab.
Relaxed Import Norms for Australian Malt Barley

With India relaxing import norms for malt barley In December 2019, India notified the World
from Australia, it is expected that beer, whisky and Trade Org anisation (W TO) of its new import
other flavoured alcoholic beverages could be conditions for Australian malt barley. Under the new
available at cheaper rates in the country in this import conditions, India will permit the import of
coming summer. Australian m alt b arley ev en w ith p hosp hine

LIQUOR
fumigation. Earlier any import in India required all this year.
fumigation to be methyl bromide-based.
The Australian malt barley as an ingredient can
This move is expected to address the huge gap reduce the cost of production of many beer and
between the demand and supply of malt barley in whisky makers in India as it costs almost the same
the country to some extent and thereby could as Indian barley whereas barley imported from other
facilitate brewery industry in India. India is expected countries to India costs more than Australian malt
to begin importing Australian malt barley in April of barley. SPIRITZ
Bimber Unveils New Single Malt Whiskies

The seven new whiskies being unveiled by the Three of the six single cask whiskies will be
London based Bimber Distillery also include Batch made available for the UK market, while the
001 of Bimber’s Ex-Bourbon Oak Casks single malt. remaining three have been allocated for the export
The whisky has been made from a vatting of markets. The UK releases include: Ex-Bourbon
American oak ex-Bourbon casks, which was laid Cask #8 (58.3 percent ABV, 100 USD); Virgin Cask
down in 2016 when Bimber commenced production. #7 (57.8 percent ABV, RRP £79.95); and Sherry
Cask #42 (58.1 percent ABV, 107 USD). The export
The first batch has been bottled at 51.8 percent
market releases comprise: Ex-Bourbon Cask #15
ABV and is limited to 1,948 bottles priced at 82 USD
(58.1 percent ABV, RRP £79.95): Virgin Cask #94
per 700ml bottle. Its tasting notes include green
(57.4 percent ABV, RRP £79.95); and Sherry Cask
apple peel and dried stone fruits on the nose, leading
#41 (57.9 percent ABV, RRP £84.95).
to baked apricots and a “sprightly pepper spicing”
SPIRITZ
on the palate.
English Whisky Launches 11 Year Old

The English Whisky Co. has launched its first which give way to a taste that is fruity with some
ever 11 year old single malt whisky. lovely oak overtones: all ending with a rich, oily and
slightly dry finish. Only 2466 700ml bottles of this
The newly launched 11-year-old whisky, which
premium beverage have been produced, each
was officially launched on 4th June, offers a complex
having a RRP of £59.95. SPIRITZ
nose with citrus, baked apples and hints of almonds,
55 Year Old Whisky from Japan to be Sold at An Astonishing Price

A 55-year-old single malt named The Yamazaki The Yamakazi comes in reddish, deep amber
from Suntory Spirits Ltd. has been announced at a colour, and is endowed with rich fruit scents and a
whooping price of 27,500 USD plus taxes. The sweet aftertaste. The company did set up a special
premium beverage will be flowed through only 100 website for purchasing the 55-year single malt
bottles and the whisky is expected to go on sale in whisky and the buyers will be selected through a
Japan by the end of June. lottery. Only residents of Japan could apply for the
lottery through the website, which lasted between
The unblended single malt whisky has been
9 am on 5th February to 8.59 am on 14th February.
maturing in white and Mizunara oak since 1964. The
Yamazaki is slated to be the oldest whisky Suntory SPIRITZ
has ever sold.

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BrewDog to Enter India with Three Beers
BrewDog, the internationally renowned brewery 101st BrewDog bar globally. 22 beers on tap
and pub-based chain from Ellon, Scotland has including an exciting list of guest beers will be part
announced its entry in to India’s beer market with of Midtown Mumbai’s heady repertoire. BrewDog
the launch of three bottled beers in retail and on envisages to come up with 35 bars across India by
trade. These beers are Punk IPA, Lost Lager: a dry 2024.
hopped pilsner, and Wild Card Wheat, which has
Initially, BrewDog will have presence in Mumbai,
been brewed especially for the Indian market. Punk
Bengaluru, Chennai and Delhi. There are plans to
IPA and Wild Card Wheat will be available in keg
expand distribution of BrewDog to Gurugram. Goa,
format for the on trade as well.
Chandigarh and other cities of India, in the next
Besides these, the company announced the phase. The chain will enter into partnership with
arrival of its brand-new tap room named Midtown Brindco Sales Pvt. Ltd. to carry out distribution
Mumbai. It will be first BrewDog’s bar in India and across the country. SPIRITZ
New Gin Liqueurs from Bombay Sapphire

The renowned gin brand Bombay Sapphire has and floral notes”, whilst Hibiscus variant offers a
launched Bombay Creations Gin Liqueurs pack. The “deeper, richer colour and aromatic taste”. Both the
gin liquors corne in Rose, Strawberry, Hibiscus and Raspberry and Strawberry variant bottles are said
Raspberry variants and each of these four 50 ml to “give a natural touch of sweetness” that can
expressions in the gift pack are bottled at 20 percent transport one to a “glorious summer’s day”.
ABV. These new expressions were crafted to
The Bombay Creations Gin Liqueurs pack is
complement the juniper and citrus notes of Bombay
priced at 15.75 USD. It can be purchased in the UK
Sapphire gin. W ith this development, Bombay
from British online supermarket Ocado from 5th
Sapphire brand, which is owned by Bacardi, has
February and supermarket chain Sainsbury’s from
ventured into the liquor market.
12th February.
The Rose variant provides a “subtle pink tone SPIRITZ
Lunar Gin from William Grant & Sons

The gin brand Hendrick’s has launched a limited which is best suited to refreshing sundowners and
edition Lunar gin in the UK market. Henddrick’s gin night-sipping”.
is owned by William Grant & Sons. The ‘Lunar’ gin
The small batch gin is the second release from
can be described as “distinctly floral with a delicate
the renowned distiller Leslie Gracie’s Cabinet of
spicy finish”.
Curiosities, which was preceded by the launch of
Why it is positioned as a ‘Lunar’ gin? According Gracie’s Midsummer Solstice Gin in 2019.
to William Grant & Sons, the gin was conceived
Hendrick’s Lunar Gin is bottled at 43.4 percent
“beneath the celestial light of the moon and yields
ABV.
an alluring complexity and a delightful warmth,
SPIRITZ

LIQUOR
Diageo Debuts New Jane Walker Bottling
To coincide with the launch of Craftswomen, Blender, Joanna Scandella; Ron Zacapa Master
Diageo has released a new Jane Walker by Johnnie Blender, Lorena Vasquez; Buchanan’s Master
Walker bottling, following the launch of the 2018 Blender, Maureen Robinson; Cascade Hollow
release. The new blend was created by Johnnie
General Manager and distiller, Nicole Austin, and
Walker’s Master Blender Emma Walker and is made
many others.
with liquid from Speyside distillery Cardhu.
The new whisky is said to have notes of ripe
Diageo’s Craftswomen programme aims to
orchard fruit and white peaches, which develop into
celebrate the “talented, bold and pioneering women”
hints of baked apple and sweet cream, with a
behind its spirits production.
lingering dark chocolate finish.
The initiative highlights the talents of Johnnie
Bottled at 41.9 percent ABV, Jane Walker by
Walker’s Master Blender, Emma Walker; Bulleit
Johnnie Walker is priced at US$38 per 750ml.
Blender, Eboni Major; Crown Royal Master Whisky
SPIRITZ
India Advances in Scotch Whisky Imports Over the USA

India has registered 16.1 percent surge in the equivalent of 1.31 bn; up 2.4 percent.
volume of Scotch whisky imports over its 2018
Export growth was driven particularly in Asia and
figures and 131m bottles (70cl bottles) were
Africa, with value increases of 9.8 percent and 11.3
im p orted b y India’s w hisky m arket in 2019,
percent respectively.
according to a Scotch Whisky Association’s report.
India claimed seventh position in the released
In the list of the 10 largest export destinations
list of top export destinations for Scotch whisky in
for Scotch whisky (defined by volume, 70cl bottles)
terms of value, with 19.7 percent rise over 2018,
in 2019, India stood second after France and was
observes the report.
followed by USA, Japan, Spain, Mexico, Germany,
Singapore, Brazil and South Africa. According to the data of the report, the largest
regional export market for Scotch whisky remains
The report revealed the industry export figures
the European Union with 30 percent, where exports
of Scotch whisky for 2019, showing worldwide
grew by 5.4 percent. However, a 25 percent tariff
growth. The export value of global Scotch whisky
on the import of single malt Scotch whisky and
exports grew by 4.4 percent to reach £4.91bn, with
Scotch whisky liqueurs into the United States raised
growth in 106 of its global markets. The number of
concerns amongst stakeholders. SPIRITZ
70cl bottles exported also increased, growing to the
Live Online Auction of Cask Whiskies

Bidders from around the world took part in the and Europe.
world’s first live, online whisky auction dedicated to Founder of auctionyourcask.com, Simon Aron,
casks. More than 300 whisky lovers registered for said, ‘’People loved the option of receiving samples.
the auction held by auctionyourcask.com and over Try before you buy is incredibly powerful.”
100 samples were sent to prospective buyers
The auction was held during 22nd January 2nd
around the world including America, Asia, Australia
February 2020 and f eatured casks including

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Glenrothes sherry hogshead and Bruichladdich four times a year the next auctions will take place
2007 in a first fill ex-Chateau Margaux barrique. in April, July and October 2020.
Auctionyourcask.com allowed private owners and
Here it deserves a mention that Cask Trade, the
investors to sell their cask to independent bottlers
company behind of auctionyourcask.com, buys and
and other investors all around the world.
sells exceptional cask whiskies. The company is
Among the prominent casks sold during the unique because it only sells casks it owns outright,
auction was a 1995 Springbank sherry hogshead and it only sells whole casks: it is not a whisky cask
which was bought for £45,000 and the Glen Orel broker and it does not offer fractional sales as part
barrel April 2015, which went for £3,100. Hosted of a fund. SPIRITZ
CSD Puts Imported Liquor Orders On Hold

Army officers may currently have to do without year. Around half of that is rum, while imported liquor
a glass of their favourite Scotch, as top global liquor accounts for just 1-1.2 lakh cases. Each case holds
brands, including Pernod Ricard and Diageo, have around nine litres of alcohol or 12 bottles of 750ml
seen orders for their imported brands being put on each.
hold by the Canteen Stores Department (CSD).
“Liquor is sold at discounted rates at these
The development comes against the backdrop canteens and the registration has to be done
of PM Narendra Modi’s appeal to go local. Although differently than those that are meant for civilian
no formal communication has been issued by the stores. The problem is, we cannot sell these bottles
CSD, purchases of imported liquor have been put any-where else in India,” said a senior executive at
on hold, Sources said. a large spirits company.
“The issue is under deliberation and the final “Our bottled-in-India liquor has a large presence
decision will lie with the government,” said an at these stores and therefore, the overall impact
official. “However, it is not just for imported liquor, from the ban on imported liquor, which is a small
during the Cov id-19 lockdow n p eriod, the part of the business, is minuscule,” said a senior
departm ent had issued p urchase orders f or executive at another global spirits company.
essential items only”
Other industry executives that TOI spoke to said
French company Pernod Ricard and UK- that it’s not only imported liquor, but a long list of
headquartered Diageo together control around 50% items that are not made in India but sold at these
market share of imported liquor sold at the army canteens has been sent to government officials for
canteens. Both companies refused to comment. further deliberation on the issue.
CSD, which operates around 5,000 stores THE TIMES OF INDIA
across India, sells 11 million cases of alcohol every
Defence Canteens Scrap Orders for Scotch Whisky

Pernod Ricard and Diageo, two of the world’s The move is seen as part of Prime Minister
biggest spirit makers, have stopped receiving Narendra Modi’s “vocal for local” campaign in which
orders for their imported brands from India’s he has called for promotion of indigenous products
defence canteen stores where they were sold at to make India self-reliant during the corona virus
concessional prices, industry sources told Reuters. pandemic, a government measure that critics have

LIQUOR
called protectionist and against foreign businesses. Talisker single malt, a second source said.
India’s defence canteens provide access to both Pernod Ricard declined to comment and Diageo
local and imported products such as liquor and did not respond to queries. The defence ministry
electronics at less than market rates to soldiers, ex- did not respond.
servicemen and their families.
While no written order has been issued, a senior
But Pernod Ricard India, whose brands include government official said a formal decision in the
Chivas and Glenlivet scotch whisky, received no matter was imminent.
orders in May for imported spirits, compared with
“We want to encourage indigenous products ...
average monthly orders of 4,500-5,000 cases by
with the PM’s campaign, it gets more priority,” said
defence stores, one source said. One case typically
the official. A bottle of Johnnie Walker Black Label
holds six, nine or 12 bottles of liquor.
costs 3,600 rupees ($47) in Maharashtra state’s
Diageo India too has not received any orders defence canteens, a third lower than the 5,500
since May for its imported brands such as the rupees ($72) retail customers pay there.
popular Johnnie Walker Black Label whisky and MINT

NEWS FROM GST
Alcohol Based Hand Sanitiser Makers Under
Scanner for Alleged GST Evasion
Misclassification of products hits tax revenue, says govt
The Goods & Services Tax (GST) Authority has have gone up considering the multifold increase in
initiated a probe into alleged tax evasion by alcohol- sales of hand sanitisers in the last 2-3 months.
based hand sanitiser manufacturers.
Tariff heading 3004 of HSN lists medicaments
“Intelligence gathered indicates that some consisting of mixed or unmixed products f or
manufacturers, including .alcohol-based hand therapeutic or prophylactic uses, put in measured
sanitiser makers, are resorting to tax evasion/ non- doses (including those in the form of transdermal
payment of GST by mis-classifying the product,” a administration systems) or in forms or packings for
government source told BusinessLine. retail sal e, including Ayurv ed ic, Unani,
Homoeopathic, Siddha or Bio-chemic systems’
The Directorate General of GST Intelligence
medicaments, put up for retail sale. Tariff heading
(DGGI), using inf orm ation f rom the Central
3808 of HSN includes insecticides, rodenticides,
Economic Intelligence Bureau and with the help of
fungicides, herbicides, anti-sprouting products and
online shopping platforms, has prepared a list of
plant-growth regulators, disinfectants and similar
62 manufacturers and suppliers who are allegedly
products.
involved in this practice, the source added. It did
not share the list citing pending investigation. Alcohol-based hand sanitiser has ingredients
such as ethyl alcohol IP, glycerol IP, hydrogen
“While the mis-classification of hand sanitisers
peroxide IP, purified water etc. According to the
produced under various established brands is being
source, hand sanitisers having ethyl alcohol as
looked into by various zonal units of DGGI, it is
ing redient is an alcohol-b ased p roduct and
requested that mis-classification of hand sanitisers
accordingly need to be classified under heading
m anuf acture d/sup p lied b y sug ar f actories/
3808 of HSN. “The active ingredient of ethyl alcohol
distilleries in your jurisdiction may kindly be verified
IP is over 70 per cent in most of alcohol-based hand
at your end in order to plug any revenue leakages,”
sanitiser,” the source said.
a communication by DGGI, addressed to the
Principal Chief Commissioners/Chief Commissio- Global Code
ners of CGST & Custom, said. The tax authority also sought opinion from the
World Customs Organisation (W CO) which has
Sources s aid m any m anuf act urers and
inferred that alcohol-based hand sanitisers are
suppliers, including sugar mills & distilleries, are
correctly classifiable under heading 3808 of HSN.
classifying alcohol-based hand sanitiser under tariff
HS Code (known as HSN Code in India) has been
heading 3004 while actually it should be under tariff
developed by WCO as a standardised system to
heading 3808 of HSN (Harmonised System of
classify goods all over the world in a systematic
Nomenclature). The GST rate on products under
manner. HSN Code has 8 digit uniform code that
tariff heading 3004 is 12 percent while for those
classifies more than 5,000 products and is accepted
under 3808, it is 18 percent. “Misclassification
globally.
appears to have resulted in substantial evasion of
GST,” another source said. An earlier estimate put In India, hand sanitisers are available in the form
the alleged evasion at over `50 crore, but it may of liquid, gel or foam. Alcohol-based sanitisers have

NEWS FROM GST
higher market share. Since, no vaccine is available This has boosted sales which have almost doubled
yet for Covid-19, a common advice for effectively on a month-on-month basis in recent times.
avoiding the infection is cleaning hands with BUSINESS LINE
sanitisers containing at least 60 per cent alcohol.
GST Council May Look at Rationalising Rates

Fewer Slabs Could be Considered at Next Meet
The Goods and Service Tax (GST) Council could same time we can have a lesser number of slabs,”
consider rationalisation of the levy, including Pandey told ET. “The council will have to take the
reducing the number of slabs, and improves, finance most practical option. “
secretary Ajay Bhushan Pandey told ET, adding that
GST has as many as seven slabs and many
the issue of compensation to states was being
exempt items. Policy-makers have indicated a three
actively discussed. Among several suggestions to
rate structure would be optimal. In view of the
improve revenues and spending power of states is
shortfall in GST due to the lockdown, states had
the option of the council borrowing from the market
raised the issue of delay in paym ent of
to pay compensation to states.
compensation.
“Rate rationalisation, removal of inverted duty ECONOMIC TIMES
structure to reduce friction among trade... at the
GST Council Borrowings for Compensation Needs

to Widen General Govt Debt: Finance Commission
Any borrowing by the GST Council to make good of borrowing is concerned, it must ultimately reflect
the shortfall in revenue of states would add up to itself upon the debt of the general government,”
the debt of both the central and state governments, Singh told reporters here.
the 15th Finance Commission chairman, NK Singh,
In the previous council meeting on June 12,
said.
2020, Finance Minister Nirmala Sitharaman had
“My understanding of the Constitution is that the said that a special meeting will be called next month
borrowing of the central government is upon the to discuss state’s compensation issue.
security of the Consol idated Fund of India.
In March, it was decided that the Centre will look
Borrowings by the state governments are upon the
into the legality of GST Council borrowing from
security of the consolidated fund of the state.
market to meet the compensation requirements.
“Now whether you have other entities which
FINANCIAL EXPRESS
borrow, whatever the picture is, as far as any kind
Late Fee for Non-Filing of GST Returns Cut Sharply

The Government sharply reduced the late fee that the returns are filed by September 30.
for not filing monthly summary return GSTR-3B, by
Further, the Central Board of Indirect Taxes and
capping it at `500 per return, down from `5,000
Customs (CBIC) has already notified that there will
earlier. This is applicable for returns starting from
be nil late fees if there is no tax liability. “Additionally,
July 2017 up to July 2020, subject to the condition

NEWS FROM GST
if there is any tax liability then a maximum late fee 2020, in addition to earlier provided relief for
of `500 per return would be applicable to such February to April this year and relief provided for
GSTR-3B returns filed up to September 30, 2020,” cleaning up past pendency of returns from July 2017
the government said in a statement. to January 2020.
CBIC said that the decision was based on It added that a uniform late fee is simpler in
various representations asking for further relief in design and easier to implement on automated
late fee charged for the tax period of May to July common portal. FINANCIAL EXPRESS
Government Caps Late Fee for GST Filing at `500

The gov ernment has capp ed the late f ee taxpayers who file returns quarterly. Even these
charged on late GST filing at `500 per return if filed return filers have got late fee amounting to lakhs of
before September 30 this year, and has made it zero rupees under the previous provisions, as of on July
for those with nil tax liability, in a bid to clear the 1, 2017, which is said to have created a mess in
ongoing confusion in the GST system. Under the system.
previous provisions, even those eligible for nil tax
For those filing for February to April this year,
were to cough up large amounts of late fee.
the late fee was waived off if they filed before June
Earlier, the late fee was `200 per day, with a 24 because of the pandemic.
cap of `10,000 per return. The late fee relates to
The cap of `500 was given to those filing returns
filing of the form GSTR3B, or the summary input-
for May to July, provided they file their returns before
output returns.
September 30. This is also applicable to those who
Even those with nil liability may have late fee have not filed earlier returns, provided they file them
piled up. Nil liabilities are generally for those before September 30. BUSINESS STANDARD

NEWS FROM STATES
Maharashtra Maize Crop Infested by Fall Army Worm,
Pune Worst Hit
Barely a month after kharif sowing began in awareness among farmers about pest disease and
Maharashtra, reports have surfaced of the Fall Army pesticides in case of emergency. The department
Worm (FAW) causing damage to the maize crop in has launched a massive outreach campaign to
the state. Compared to last year, the FWA has come control the pest, the official maintained.
early to Maharashtra this time around.
Reported for the first time in 2018, FAW is a
Since the monsoon has begun on time this pest which feeds on 80 different crops, including
season, ideal conditions have been created for the maize, soyabean and jowar. This pest is blamed
host to f lo urish and m ultip ly, a ccording to for the large scale destruction of the maize crop in
entomologist Anuksh Chormule. A single worm can various parts of the world. Last year, FAW was
lay 1,000 to 1,500 eggs at a time, and therefore, it responsible for a dip in maize production in India.
becomes very difficult for the farmer to control the FAW had infested 700,000 hectare under maize crop
spread of the infestation, Chormule said. Maize is in 2019-20 kharif season, 40% more than the
primarily cultivated in Nashik, Aurangabad, Pune affected area of around 500,000 hectare last year,
and Solapur on nearly 8 lakh hectare across the as per reports.
state.
Attack by the pests was reported in 14 states in
Officials from the Maharashtra agriculture kharif with major dam age in Karnataka and
department confirmed that FAW infestation has Maharashtra. Infestation of FAW in kharif maize
been reported in the maize crop across the cereal crop was reported across 263,000 hectare in
grain growing regions in the state. They, however, Karnataka and 232,000 hectare in Maharashtra.
could not put a figure on the extent of the infestation. Maharashtra reported FAW infestation in more than
As per reports, the infestation has affected nearly 2.63 lakh hectare of the 8.60 lakh hectare of the
50% of the crop in Pune district in Indapur taluka maize crop in 2019-20. Infestation was also reported
on some 1,500 hectare, 10-15% in 7,000-8,000 in jowar and cotton.
hectare in Ahmednagar district, 3-4% in Nashik
Originally found in North and South America,
district and in some parts of Akkalkot, Mohol,
FAW made its way to Nigeria in 2016. Within two
Malshiras and south Solapur.
years, it had spread to 44 countries in Africa,
According to officials from the agriculture damaging up to 40 million tonne of maize.
department, the Crop Pest Survey and Consultation
FINANCIAL EXPRESS
Project (Cropsap) has been enforced to create
Liquor Shops for Women in Madhya Pradesh

The Madhya Pradesh Government has decided This is a part of the Madhya Pradesh govern-
to open exclusive liquor shops for women in the ment’s new excise policy, which will come into effect
state. The “women friendly” alcohol shops will sell from April.
wine and whisky of brands that are popular among These exclusive liquor outlets will only offer BIO
female tipplers. Two such liquor outlets each will brands and even the liquor brands that are not
be opened in Bhopal and Indore, and one each in registered in the state would be available for sale
Jabalpur and Gwalior, in malls or upmarket places. at these shops without any additional duty lecvied

NEWS FROM STATES
by the state government. government has also decided to hold wine festivals
in Bhopal, Indore, Gwalior and Jabalpur. SPIRITZ
In a bid to promote state-made wines, the
Madhya Pradesh to Have Grape Wine Outlets at Its Tourist Places

In the Madhya Pradesh government’s new liquor India’s wine industry and is expected to give a fillip
policy for fiscal 2020-21, there has been a decision to tourism in the state.
to open 15 grape wine outlets at tourist places in
In the Madhya Pradesh government’s new liquor
the state. It is being done with the objective to
policy for fiscal 2020-21 it was also announced that
increase the income of grape farmers and promote
barcodes will be introduced on alcoholic beverage
grape cultivation in the state of Madhya Pradesh.
bottles to track their supply from factories to outlets.
This initiative can also be welcome news to SPIRITZ
Liquor Prices in Goa Set for Hike

There is bad news for tipplers in Goa. While can take solace from the fact that despite these
presenting budget, the Chief Minister of Goa, hikes, prices of alcoholic beverages available in
Pramod Sawant announced hikes in excise duties Goa would be cheaper than that in other states of
and fees on the sale of liquor in the state of Goa. India, in the new financial year. Sawant has also
The hikes varied from 20 percent to 50 percent for proposed to introduce a unique hologram on each
all categories of liquor to be sold in Goa. One can bottle of liquor in Goa which would authenticate the
expect that from the new financial year onwards, liquor and thereby prevent its counterfeiting.
that is from 1st April 2020, liquor is set to cost up to
The government of Goa will garner an additional
50 percent more in Goa.
excise revenue of `100 crore through the new excise
However, alcoholic beverage drinkers in Goa duties and fees. SPIRITZ
General India Refrains to Tighten Duty Free Limits

In the recent past, the Indian government decided to maintain the current limit of two litres
planned to restrict duty free shopping and for this it per person returning from abroad to India, rather
had mooted reducing the volume of liquor that than cutting it to one litre.
travellers could bring into India, when returning from
The decision found favourable resonance with
abroad, from the current 2 litres to 1 litre. However,
Asia Pacific Travel Retail Association. SPIRITZ
during the Union Budget 2020-21, the government
License Fee for Bars & Breweries Increased in Kerala

The Kerala government has raised the annual license fee of FL-7 (airport lounge) will be enhanced
licence fee of bars and breweries. As per the new from `1 lakh to `2 lakh.
liquor policy of the state for 2020-21, the licence
As per the new liquor policy approved by the
fee of foreign liquor-3 bars will be increased from
state cabinet, a fee of `2 lakh would be levied on
`28 lakh to `30 lakh. Licence fee of FL-4 A (club)
distilleries from outside, the state to brew liquor in
will be increased to `20 lakh from `15 lakh and the
distilleries in Kerala. SPIRITZ

NEWS FROM STATES
Canned IMFL for Uttar Pradesh
Instead of glass bottles, Indian Made Foreign tion of alcohol to some extent. This would also save
Liquor (IMFL) will be sold in aluminum cans in Uttar the cost of production of the companies selling IMFL
Pradesh. UP becomes the first state in the country in the UP, as possibility of breakage of bottles would
to introduce canned IMFL. This decision has been go. Moreover, aluminum cans will be cheaper than
taken under the new excise policy of UP. the glass bottles.
The aluminum can packaging of IMFL, instead The proposal for selling country-made liquor in
of IMFL in glass bottles, is expected to be beneficial tetra packs has also been given the green signal in
for the environment. It may also prevent adultera- the new excise policy of the UP. SPIRITZ
Delhi’s New Excise Policy with No Change from the Last Fiscal’s
Delhi Government has notified the excise policy spread of COVID-19 in the national capital.
for the ongoing financial year where there is no There are around 950 hotels, clubs and restro-
change from the Delhi’s government’s excise policy bars in Delhi with excise licenses, which have not
of the last fiscal. The policy was scheduled to come been allowed to open since 25th March 2020, when
in April of this year but has been delayed as the the first nationwide lockdown was announced.
government machinery was busy in arresting the SPIRITZ
Chandigarh’s New Excise Policy Approved

UT Chandigarh’s Excise Policy 2020-2021 has system, online system for issuance of permit and
been approved to come into force from 1st July, licensing units have been reduced from 95 to 94
2020. The policy will remain in effect from July 1 to under the new policy.
March 31, 2021.
Under the new policy, a single entity will be
An additional excise duty of 12 percent and cow entitled to allotment up to a maximum of 10 vends.
cess at 5 percent have been introduced that will be Covid cess will be levied at 5 percent on minimum
charged on all liquor bottles. Liquor prices are set retail sale price of all categories of liquor. It will be
to be 20 percent to 25 percent higher. E-tendering levied up to December 31, 2020. SPIRITZ
Jharkhand Women form 20 Percent of Online Liquor Consumers

As home delivered alcohol is gaining momentum introduced in a few cities of the state, which include
in India, many liquor vends in Jharkhand have came Bokaro, Dhanbad, Hazaribagh, Ranchi, Giridih,
on board to join the growing network of home Ramgarh and Jamshedpur. There are 45 liquor
delivery services carried out by Swiggy. shops through which liquor delivery takes place
Data f rom f ood ag g reg ator S w ig g y has across the state but this number is expected to
unearthed that 20 percent of customers buying increase.
liquor via online for home in Jharkhand are women, More than 500 liquor brands of whisky, vodka,
and w hisky is the p ref erred ch oice am ong rum and beer are on offer through online, in the state
consumers. Swiggy is the only food aggregator of Jharkhan d. These are, deliv e red as p er
permitted to deliver liquor in the state. availability of stock in the districts.
At present, home delivery services have been SPIRITZ

NEWS FROM STATES
Karnataka Allows Microbreweries to Operate
The Karna taka g ov ernm ent has g iv en hours of the microbreweries shall be from 9 am to
permission for fresh brewing or production of beer 9 pin and all other conditions as laid down will
and to sell it in microbreweries as takeaways. The remain same. However, government had collected
decision comes after the lockdown restrictions were revenue of `1387.20 crore during the lockdown, in
eased in the state. the month of May.
As per the decision, the opening and closing SPIRITZ
Home Delivery Platforms in West Bengal’s Liquor Market

The West Bengal State Beverages Corporation cities and planning to launch liquor home delivery
Ltd (WBSBCL) has signed an agreement with operations very soon. Hip Bar, India’s only RBI-
Swiggy, Zomato, HipBar and Spencer for liquor approved mobile wallet exclusively for liquors is also
delivery service to carry out doorstep delivery in planning to start its operations. However, Spencer’s
Kolkata. Retail liquor wing has carried out a pilot project to
start its full operations.
Swiggy and Zomato are the app and web-based
delivery platforms already famous in the state’s SPIRITZ
Rajasthan Levied Surcharge

The Rajasthan Government has increased liquor Rajasthan Macle Liquor (RML), namely Royal XXX
prices by imposing a surcharge up to `30 for the Rum, Royal Vodka and Royal Classic Whisky.
purpose of mitigating natural and man-made
The government also increased the basic
calamities and public health exigencies.
licence fee for the sale of country liquor from `10 to
The surcharge on Indian Made Foreign Liquor `20 for one bulk litre. In another development, the
(IMFL) will be `5 for 180 ml and 375 ml bottles and department amended the notification of 1997 to the
miniature and other packaging, and `10 on 750 ml Rajasthan Excise Act, 1950, to increase the
bottles. However, for beer, `20 will be charged for additional fee. This has been increased from 25
650 ml and 500 ml bottles and `5 for 330 ml bottles percent to 35 percent for IMFL with EDP below `900,
and other packaging. A surcharge of `1.50 has been and from 35 percent to 45 percent for IMFL with
lev ied on ev ery bottle of country liq uor and EDP of `900 or above. SPIRITZ
Madhya Pradesh Government to Drive Liquor Outlets

The Madhya Pradesh Government started Around 70 percent contractors have surrende-
preparations to run liquor shops whose licences red their licenses after HC order on the matter filed
were surrendered by licensees amid differences by a group of contractors.
between both the parties on reopening the liquor
They have refused to open their liquor vends
outlets in the state. The state government has now
for well over two weeks due to poor sale owing to
decided to operate around 1,000 liquor shops across
the economic slowdown caused by the COVID-19
the state till it finds new contractors in the rebidding
spread. SPIRITZ
process, as per a news report.

NEWS FROM STATES
SC Asks Tamil Nadu to Formulate Framework for Liquor Sale
The Supreme Court permitted Tamil Nadu they can be sold.
Government to devise methods to sell liquor through
The top court agreed with the argument of the
online or physical sales and said that it is not for a
state government’s firm, Tamil Nadu State Marketing
court to lay down procedures as to how alcoholic
Corporation (TASMAC), which sells alcoholic
beverages can be sold.
beverages in the state, that it cannot be instructed
A bench of the apex court comprising Justices to sell liq uor only through online and hom e
Ashok Bhushan, Saujay Kishan Kaul and M.R. Shah deliveries. TASMAC agreed to file an affidavit within
said that the medium for sale of alcoholic beverages three weeks regarding the Standard Operating
is for the state government to decide, and it is not Procedure (SOP) put in place for sale of liquor in
for the court to lay down a framework as to how retail shops in Tamil Nadu. SPIRITZ

NEWS ON SMALL SAVINGS
EPFO Cuts Back on Debt, Equity Play as Lockdown Hurts Inflows
Halves Investments in the past 5 weeks with equities impacted most as retirement body
turns risk-averse; corporate bond market, too, faces drying up of demand
The Employees’ Provident Fund Organisation

(EPFO), India’s biggest debt investor, has cut its
investments in bonds and equities in the past five
weeks as contributions to the corpus decline and
claims rise due to the sudden disruptions in salary
incomes on account of the nationwide lockdown to
combat Covid-19.
The fund is estim ated to hav e halv ed its

investments to about 5,000 crore since May, said a
senior executive involved in EPFO’s decision significant during lockdown period,” said Ajay
making. In May alone, it invested about 4,000 crore Manglunia, head of fixed income at JM Financial.
compared with an average of `8,000-`9,000 crore “Once the economy comes back to normalcy,
every month prior to the lockdown. institutional debt investment is likely to resume usual
investments.”
The decline in contributions is leading to equities
bearing the brunt as the EPFO is turning more risk- Last year, EPFO used to receive 614 crore every
averse with the uncertainty of second wave of day from its members. Half of it was being invested
infections and likely financial stress for companies. and the remaining used to settle dues. The share of
investment has now come down 30-40 percent with
“Majority of its investments are in bonds as it monthly flows significantly falling. With unlocking,
has reduced the share of equity investments,” the the scene may improve in the months ahead, said
person told ET. The retirement body is mandated to the source.
invest up to 15 percent of its corpus into the equity
market. The share may have gone to 10 percent EPFO can invest up to 45 percent of its corpus
amid looming economic uncertainties. into corporate bonds rated not below AA by two
rating companies. However, it has stopped investing
The Central Provident Fund Commissioner did in private sector bonds after its two bets including
not reply to ET’s queries until Thursday press time. DHFL blew up. The retirement body has a total
The reduction in investments has also cut corpus of over `12 lakh crore, show latest data.
demand for corporate bonds. Even after RBI’s 40 More than two months ago, the finance ministry
bps rate cut on May 22, the spread or differential relaxed EPFO withdrawal norms as it allowed
between benchmark bond yields and top-rated people to withdraw 75 percent of the credit standing
public sector and private sector companies remains in the provident fund account, or three months of
in the range of 80-90 bps as it was before the rate wages, whichever is lower. In May, EPFO settled
reductions. about `10,000 crore claim s due to Covid-19,
“Large investor absence is felt in the corporate sources said.
bond market as the demand for papers is not so ECONOMIC TIMES

Interest on PPF, Bank Deposit to be Calculated in GST Limit
The value of exempted income, like interest on said that the applicant is required to consider the
PPF, savings bank account and loans given to v alue of both taxable sup ply i.e. “renting of
family/friends, will be included along with taxable immovable property” and exempted supply of
supplies while calculating the threshold limit for service provided by way of extending deposits,
obtaining GST registration, the Authority for Advance loans or; advances for which he earned interest
Ruling (AAR) has said. income, to arrive at “aggregate ‘ turnover” to
determine the thresh, old limit for the purpose of
Under the Goods and Serv ices Tax law,
obtaining registration underthe GST Act.
businesses and individuals are required to obtain
GST registration if their aggregate turnover is `20 “We conclude that the applicant is required to
lakh or more. aggregate the value of exempted interest income
earned by way of extending deposits in PPF &, bank
An individual, not engaged in any business, had
savings accounts and loans and, advances given
filed an application before the Gujarat bench of AAR
to his family/friends along with the value of the
asking whether interest received from savings bank,
taxable supply i.e., renting of immovable property,
PPF and loans and advances to family would be
for the purpose of calculating the threshold limit of
considered forthe purpose of calculating threshold
`20 Lakh for obtaining registration under GST law,”
limit of `20 lakh for registration under GST law.
the AAR said.
The individual, in his application, had disclosed
AMRG & Associates Senior Partner Rajat
that his total receipts in 2018-19 fiscal were about
Mohan said this ruling may lead to homemakers,
`20.12 lakh, including rent receipt of `9.84 lakh,
retired p ersons and free lancers taking GST
while the remaining was interest on bank, PPF
registration. “The authority failed to distinguish
deposits and from personal loans extended to
between earnings made in the individual capacity
friends/family.
and in the business capacity,” Mohan added.
The AAR, while ruling that interest income would
be included for calculating registration threshold, FINANCIAL EXPRESS
Income Tax Exemptions for Lower Tax Assessee

on Fellow Allowances
The direct tax board has provided income tax Taxes said the exemption provided in respect of free
exemptions for certain allowances to those opting food and non-alcoholic beverage provided by such
for the lower tax regime. employer through paid voucher will not apply to an
employee.
Now, assessees can claim an exemption in
respect of tour, transfer allowance, daily travel The Budget for 2020-21 came out with an option
allowance, and conveyance allowance. Besides, of lower tax regime for those who forgo certain
transport allowance for handicapped up to `3,200 exemptions. For instance, those opting for the
a month would also be given ad-hoc exemption. scheme are required to pay tax at the reduced rate
of 10 per cent for income between Rs 5 lakh to `7.5
Amending the relevant provisions of the Income
lakh against the current rate of 20 per cent.
Tax Act for this purpose, the Central Board of Direct
BUSINESS STANDARD

Invest in PPF by Day 5 of Month to Maximise Interest
Interest is calculated on the minimum balance in the PPF account from the fifth
day till the last day of each month
Public Provident Fund (PPF) is a very good A simple example will give us an idea of how a
investment option that provides tax benefits, the slight change in our payment schedule could provide
interest earned as well as final maturity amount is us that extra advantage. We will take two scenarios
tax free. However, many investors do not know how one where we invest before the 5th of the month
interest is calculated in PPF. Thus they tend to ask and another where we invest after 5th of the month.
questions like when is the best time to invest, Let us say we invest `50,000 on August 3. The
w hether lu m p sum inv estm ent or m onthly interest rate is 7.1% and our balance is `3 lakh on
investment is more beneficial, etc. July 31. Now, between August 5 and August 31, our
minimum balance is `3.5 lakh and our monthly
The government on March 30,2020 announced
interest would be (7.1%/12X3.5 lakh) `2,071.
a steep cut in the interest rates on small savings
schemes. PPF interest rate is now at 7.1%. The In the second scenario, we deposit `50,000 on
interest rate on small saving schemes and PP Fare August 6 and our balance as on July 31 is `3 lakh.
reviewed every quarter by the government. There So our minimum balance between August 5 and
is a Shyamala Gopinath committee which prepares August 31 is `3 lakh so our monthly interest would
the formula for calculating the interest rate on small be (7.1%/12 X 3.0 lakh) `1,775.
saving schemes. The committee had suggested that
So as a PPF subscriber, if you wish to maximise
the interest rates of different schemes should be
your interest earnings, you should deposit your PPF
25-100 bps higher than the yields of the government
contributions on or before the 5th of every month.
bonds of similar maturity.
The ideal option would be to invest `1.5 lakh
Interest Rate Calculations between April 1 and April 5 (total limit for investing
Currently, interest on PPF balance is calculated in a year is `1.5 lakh) at the start of the financial
on a monthly basis but it is credited to your account year. But many i would not have the entire sum to
at the end of the financial year (March 31). Now let invest in the beginning of the year, so they can
us go further and see how interest is calculated deposit some amount regularly every month but they
every month. The interest is calculated on the should try to deposit it by the 5th of that month to
minimum balance in the PPF account between the avail the maximum benefit as per the interest
fifth and the end of each month. So in a nutshell, if calculation method. The amount maybe minuscule
you invest after the 5th of that month, you will only but why should we let go of interest on our hard-
get interest on the previous month’s balance but if earned m on ey. So next tim e w h en you are
you invest on or before the 5th of that month, then depositing money in PPF, try to deposit it by the 5th
you will get interest on the current month’s balance of that month.
apart from previous month’s balance. FINANCIAL EXPRESS

Salary Cut? Your Gratuity May Now Take a Hit
If your basic pay and DA have been cut, total amount will be adversely impacted
The salary cuts that have taken place will have Shekhar, India business leader-health and wealth,
a bigger impact on employees set to retire shortly. Mercer.
Besides taking a hit on their current income, they
What can employees do about this? They can
may also take home a smaller amount as gratuity
speak to their employer, so that their basic is not
the retirement benefit given to employees who have
touched. Beyond that, it is up to employers. “Since
rendered minimum of five years of service to an
this is an unprecedented crisis, companies should
employer.
take a paternalistic view. As a goodwill gesture for
For each year of service completed (or part an employee’s long years of service, they should
thereof in excess of six months), the employer pays consider the pre-Covid salary for the purpose of
gratuity at the rate of 15 days’ wages based on the gratuity calculation,” says Lobo. Lawyers say going
rate of wages last drawn by the employee. Here, strictly by the provisions of The Payment of Gratuity
15 days’ wages are calculated by dividing the Act, the amount payable would be based on last-
monthly rate of wages last drawn by him by 26 and drawn salary. “The object of paying gratuity is to
multiplying the quotient by 15. The formula is: enable the employee to enjoy social security and a
Monthly wage x number of years of service x 15/ decent standard of living after retirement. Also, the
26. reason the last-drawn salary has been prescribed
“While the term ‘last-drawn wages’ is not defined for computing gratuity is that it is typically the highest
in this Act, the term ‘wages’ for computing gratuity salary drawn by an employee in his normal course
includes last-drawn basic and dearness allowance of employment,” says Nand Kishore, partner, DSK
(DA),” says Suresh Surana, Founder, RSM India. Legal.
Explaining further, Anil Lobo, independent He adds that in the absence of clarification or
consultant-retirem ent & benef its, says: “If a specific legislation, employers are likely to stick to
company adheres to the Act, the gratuity amount is the last-drawn salary for computation of gratuity.
capped at `20 lakh. But it can pay more. Any amount Anuj Shah, Chief Financial Planner, Wealth 360,
above `20 lakh will be taxable.” adds: “Gratuity is an ex-gratia payment. If a
com pany w i shes to pay m ore th an w hat is
The impact of a salary cut will depend on the prescribed by the law; dial that is possible."
com p onents that hav e b een re duced. “An
employee’s gratuity will be affected if his basic While this is a setback, it is unlikely to affect a
salary and DA have been cut. But if components retiree’s retirement planning. “Roughly speaking, a
outside these have been cut, there will be no person gets 15-day basic (assuming he has no DA)
impact,” says Deepesh Raghaw, founder, Personal for each year of work done. If he has worked for 20
Finance Plan, a Securities and Exchange Board of years, he will get 10 months of basic as gratuity. If
India registered investment advisor. his basic has been cut by, say, 20 per cent, he will
lose two months of basic. It is a hit, but it won’t
Experts say companies have mostly steered affect his retirement planning per se if he has been
clear of slashing the basic salary. “Typically, the saving diligently,” says Raghaw.
salary cut is from allowances or variable pay and BUSINESS STANDARD
the basic is not affected,” says Preeti Chandra

Partial Withdrawal from EPF, NPS Can Hurt
Stringent rules have been put to ensure that this practice is discouraged
Whenever a major financial emergency arises, Stringent rules for
there is a strong tendency to dip into one’s partial w i thdraw al:
retirement savings. This should be avoided. In old Partial withdrawals can
age, income from profession, job or business be m ade from EPF for
decline, and one has to live off one’s savings and marriag e or education,
investments. W ith joint families splintering into purchase or construction
nuclear ones, that age-old support system has also of a house, purchase of
vanished. It is to prevent people from using up their land, home renovation,
savings prematurely that the rules for partial repayment of home loan,
withdrawal for retirement-oriented products have etc. The maximum limit on
been kept fairly stringent. partial withdrawal varies,
dep endin g on the
Experts suggest extreme caution when deciding
p urp ose. Pa rtial w ith-
to use one’s retirement savings to finance other
drawal is tax-free if the
goals. “Your retirement savings act as the life jacket
EPF account has been held for five continuous
at a time when all other sources of income have
years. Partial withdrawal from NPS is also allowed
ended. They are extremely important for leading a
only in specific situations: for children’s higher
comfortable retired life,” says Vijay Kuppa, co-
education and marriage, purchase or construction
founder, Orowealth.
of residence, treatment of a specified list of critical
Key retirement products: The most important illnesses, to meet the expense of self-development,
retirement product for employees is Employees’ and to estab lish one’s ow n v enture. Partial
Provident Fund (EPF). Both the employer and the withdrawal can be done only if the account is at least
employee contribute 12 per cent of the basic salary three years old. This rule is waived if partial
plus dearness allowance to it. EPF currently offers withdraws I is for ski 11 development. The cap on
a return of 8.5 per cent. If an employee works for partial withdrawal from a tier-l account is 25 per
more than five years, the corpus becomes tax-free cent of the account holder’s contribution (not of the
at maturity. total corpus). Only three such withdrawals are
allowed during the entire tenure. The maximum 25
Instruments like National Pension System (NPS)
per cent partial withdrawal allowed is tax-exempt.
and Public Provident Fund (PPF) are also available
to the self-employed as well. NPS is a market-linked A PPF account holder can make one partial
product where you can allocate money to four types withdrawal each year from the seventh year (that
of funds: equity, corporate bond, government bond, is, on completion of six years). The withdrawal
and alternative investment. PPF is a fixed-income amount is limited to 50 per cent of the total balance
option with sovereign guarantee. It has a tenure of at the end of the fourth year immediately preceding
IS years, which can be extended in blocks of five the year of withdrawal, or the year immediately
years. The current interest rate is 7.9 per cent, which preceding the year of withdrawal, whichever is
is also subject to review. The corpus received on lower.
maturity is tax-free.
Experts say one should avoid dipping into one’s

retirement corpus for other goals like building a Joseph, founder and managing partner, Germinate
house or children’s education. “In this era of nuclear Wealth Solutions, also suggests caution. “Using
families and absence of Social Security, the only your retirement savings to finance other goals is an
thing you can fall back on is your savings for leading extremely sensitive and important issue. Explore all
a dignified life in retirement,” says Omkeshwar other options before dipping into your retirement
Singh, head-Rank MF, Samco Securities. Santosh savings,” he says. BUSINESS STANDARD
I-T Return Filing Date Extended to November 30, 2020

Some relief Extensions granted to provide further relief to taxpayers for making various compliances: CBDT
The government on Wednesday provided further November 30, 2020. Therefore, tax audit report can
relief to taxpayers by extending statutory and be furnished by October 31,2020.
regulatory compliance deadlines under the income
Self-assessment tax with liability up to `1 lakh
tax act, which were set to expire by June-end.
can be paid till November 30, but no extension has
Extensions ranging between one month and been granted to those having liability of over `1 lakh,
three months have been granted for filing of income and delayed payment would attract the applicable
tax returns, audit reports, making investments in rate of interest. “This will provide relief to small and
savings instruments under income tax, issuing of middle class taxpayers,” experts said.
Form 16 by companies to employers besides
Taxpayers can make investments in various
issuing notices or orders by authorities under
savings instruments such as National Savings
various direct taxes and Benami Law. Deadline for
Certificate, Public Provident Fund, National Pension
linking PAN with Aadhaar has also been extended
Scheme, m ediclaim insurance schem es and
by three months.
donations for income tax rebate for FY 2019-20, till
The extensions have been granted “in order to July 31. The earlier deadline was June 30.
provide further relief to the taxpayers for making
Investment in saving instruments or investments
various compliances,” the Central Board of Direct
for roll over benefit of capital gains under Income
Taxes (CBDT) said in a notification dated June 24.
Tax Act, has been extended by three months till
The extension will reduce hardship of taxpayers September 30, thus making them eligible for
on one hand and will also give some more breathing claiming deductions from capital gains in the same
time to tax officers, said experts, amid challenges time frame. The earlier deadline was June 30.
faced by taxpayers in meeting the statutory and
The date for commencement of operation for
regulatory compliance requirements across sectors
the SEZ units for claiming tax holiday has been
due to the outbreak of Covid-19.
extended to September 30, 2020 for the units which
Original as well as revised income-tax (IT) received necessary approval by March 31,2020.
returns for the FY 2018-19 or assessment year
“The government realises that business need
2019-20 can be filed by July 31,2020.
some more time to get back to normalcy. Even the
Returns of income required to be filed by July tax offices are not working at their full strength and
31, and October 31, can be filed to November 30, they may also need additional time to complete the
since due date for I-T return for the FY2019-20 or assessments and other proceedings,” said Shailesh
assessment year 2020-21 has been extended to Kumar, Partner, Nangia & Co LLP For authorities,

deadlines for tax deducted at source (TDS) and tax w ith PAN w ould also b e extended to March
collected at source (TCS) stat em ents and 31,2021,” the CBDT clarified.
certificates for FY 2019-20, have been extended till
The reduced rate of interest of 9% for delayed
July 31 and August 15, respectively The statements
payments of taxes, levies, etc shall not be applicable
and certificates are needed by taxpayers to prepare
for the payments made after June 30,2020.
I-T returns.
Completion or compliance of actions required
The date for passing of order or issuance of
to be completed furnishing of declaration, passing
notice by the authorities and various compliances
of order, etc under the Vivaad se Vishwas tax
under various direct taxes and Benami Law which
dispute resolution scheme have been allowed till
are required to be passed or issued by December
Decem b er 3 1,2020. Necessary l eg islativ e
31, 2020 has been extended to March 31,2021.
amendments shall be moved in due course, the
“Consequently, the date for linking of Aadhaar government added. ECONOMIC TIMES

GENERAL
E-Commerce Firms in High Spirits: BigBasket
BigBasket, Amazon, Swiggy and Zomato foray into Alcohol delivery in select cities,
but scaling up will be tough
Alcohol delivery is emerging as the next big checks if the customer is really present in it or if it
thing in India’s e-commerce scene. BigBasket and is a photo of a photo,” says a Swiggy spokesperson.
Amazon recently acquired licences for delivering The company has also introduced a crowd control
alcohol in West Bengal. Food aggregators Swiggy feature for the safety of its delivery partners, which
and Zomato are already offering alcohol delivery ensures there is no overcrowding at the retail stores
services in Jharkhand, Odisha and West Bengal. during peak hours.
This could b e a lucrative business f or e- These companies are tying up with authorised
commerce companies as several states continue retailers in specific cities for delivery. Zomato, for
to be under lockdown and consumers are wary of instance, has a total of 250 retailers on board so
visiting liquor stores to buy alcohol, given the risks far, and has plans to partner with all the authorised
involved. Start-ups such as HipBar, Drinkify and government retailers in the cities where it is active.
Liqhub tried their hands at alcohol delivery in the
Although these e-commerce players are in talks
past, but hit regulatory hurdles.
with other states to scale up their services, at the
However, in view of the huge losses incurred moment, their focus is on getting the processes
b y state g ov ernm ents during th e lockdow n right. “Alcohol delivery is complex, involving multiple
according to a report by the Reserve Bank of India, stakeholders governments, retailers, and brands
on average, Indian states collected `15,000 crore and strict operating guidelines. These are early days
per month as excise duty on alcohol in 2019-20 and it faces challenges typical to any new category,
regulations have been eased. This has attracted such as technology adoption by suppliers, stock
interest among several e-commerce companies availability, etc,” says Rakesh Ranjan, VP Zomato.
eyeing the alcohol business in India, which Statista
estimates is valued at `2.4 lakh crore.
Bottlenecks
Dev ang shu Dutta, chief executiv e, Third
Prepping the Tech
Eyesight, says following the diverse regulatory
E-commerce firms venturing into this space are
guidelines will not be easy for these companies.
busy developing technology for age verification,
“Since every state has its own set of rules, adhering
which is critical from a regulatory compliance
to them will be challenging for the companies
standp oint. Zom ato has adop ted a tw o-step
entering this space, especially when they are eyeing
verification process for ascertaining the age of the
pan-India operations.”
user, while Swiggy has developed an AI-based face
recognition feature with OTP to automate age Zomato and Swiggy, on average, are charging
verification and user authentication. `60-`100 per order for delivery, depending on the
order size and distance covered. The Odisha
“We have mandated a one-time instant age
government has fixed the delivery fee at `100 for
verification followed by a selfie of the customer. The
orders up to `1,000, and beyond that for every `500,
integrated solution instantly digitises the customer’s
charges go up by `25, with a ceiling of `300 on
identity card, checks if the customer ’s selfie
delivery charges.
matches with the picture on the card, and then

GENERAL
Ankur Pahwa, partner and national leader customers are looking at stocking up for the month.
e-commerce and consumer internet, EY India, says
Rajat Wahi, partner, Deloitte India, says that
a “reasonable” delivery fee is critical in the adoption
these com panies could expand into alcohol
of this service. “A customer buying 10 bottles of beer
distribution going ahead, which, so far, has been
would not mind shelling out `100 as delivery fee,
tightly controlled by the states. “Currently, there are
but someone buying one or two products may not
only 86,000 alcohol stores in the country, as
want to spend as much on delivery.”
com pared to 10-12 m illion FMCG retailers.
He foresees that food aggregators would benefit Distribution is the bigger play here,” he adds.
from the impulse purchases, while grocery players
would see planned orders coming their way, when FINANCIAL EXPRESS
Whisky & Cola Mix to Lift Restaurant Workers' Spirits

Big liquor and non-alcoholic beverage brands roll out programmes to help
employees of industry hit by Covid-19.
Altruism and self-interest have led some major
soft drink and liquor brands to help India’s struggling
restaurant industry. Restaurants account for close
to 50 % of the sales of major food and alcohol
brands.
Industry estimates peg the restaurant sector’s

job losses at 2 million. Many establishments are
facing the threat of permanent closure. Swiggy says it has its own help programme the
Alcohol still cannot be served in restaurants, ‘jumpstart’ package which will offer safety kits and
which also have restricted timings. w hat the com pany called ‘b usiness b ooster
programmes’ at “heavily subsidised rates”. Diageo,
PepsiCo has partnered with online food delivery
maker of Johnnie Walker and Black Dog whiskies,
p latf orm S w ig g y and National Restaurant announced a `75 crore fund under its global “raising
Association of India (NRAI) to launch a programme
the bar” programme for restaurants and bars. The
#SaveOurRestaurants on Thursday. With the order liquor company’s Managing Director Anand Kripalu
of any soft drink, juice or iced tea on Swiggy, the
said the fund is aimed at helping restaurants and
multinational company will contribute to NRAI’s bars as they adjust to harsh realities of post-Covid
employee relief fund.
pandemic business.
A PepsiCo India sp okesp erson said the Premium spirits company Beam Suntory, maker
company will “work with” some Hollywood actors of Jim Beam whisky among other products, has
and other “influencers” to encourage consumers to pledged `1 crore for a programme for bartenders.
add a beverage to their food delivery order. ECONOMIC TIMES

GENERAL
Teri, Maithri Aquatech Sign MoU to Generate Water
from Atmospheric Moisture
The Energy and Resources Institute (TERI) and moisture of all contaminants and odours. The
Maithri Aquatech have signed an MoU to work technology can meet the water requirement of all
towards the provision of universal access to drinking companies, from MSMEs to large corporations,
water through an ‘air-to-water’ technology. The educational institutes, hosp itals , airp orts,
product, Meghdoot, is an atmospheric water residences, etc,” Mr. M. Ramkrishna, Founder and
generator and remineraliser that condenses the Managing Director, Maithri Aquatech, said.
moisture in the air, collects it, and produces safe
The equipment produces 100% microbe-free
drinking water. The alliance is expected to create
potable water, requires minimum maintenance and
evidence for greater acceptance of air-to-water
is easy to set up and use, said the statement, adding
technology in India.
that it is a decentralised and environment-friendly
“We are joining hands with Maithri with an aim solution. The atmosphere contains 37.5 million
to assess the potential of their technology in meeting billion gallons of water as moisture and less than
the Sustainable Development Goal (SDG) of 1% of it is required to meet global water demand, it
equitable access to water, or the goal under the Jal pointed out.
Jeevan Mission of the Government of India for
According to Maithri, the technology has been
providing piped water connection to every rural
deployed successfully by the Indian Railways and
household by 2024. If found feasible, TERI will work
the Army, apart from private organisations, hospitals
on raising wider awareness about the technology,”
and residences, among others.
Mr. Syamal Kumar Sarkar, Distinguished Fellow,
TERI, said in a statement. TERI will conduct a study on the suitability and
adaptability of the technology under different
“The technology has been designed with an
climatic conditions. CHEMICAL WEEKLY
intricate filtration system that rids the collected
IMF Set to Cut Economic Forecasts Warns of A Crisis

‘Unlike Anything the World Has Seen’
The International Monetary Fund (IMF) will likely She also cited a striking divergence of financial
forecast a worse contraction in the global economy markets from the real economy, which could portend
than previously estimated for 2020 and sees greater volatility in financial markets and potentially
“profound uncertainty” about the path of recovery, sharp corrections.
IMF Chief Economist Gita Gopinath said in a new
The IMF is due to update its World Economic
blog.
Outlook on June 24. Managing Director Kristalina
Gopinath said the economic crisis triggered by Georgieva last month said the Fund was “very likely”
the novel corona virus pandemic was more global to revise downward its already pessimistic forecast
and playing out differently than past crises, with the for a 3 per cent contraction in global gross domestic
services sector hit harder than manufacturing in both output in 2020, but gave no details. “For the first
advanced and emerging market economies, and time since the Great Depression, both advanced and
inflation low across the board. emerging market economies will be in recession in

GENERAL
2020. The forthcoming June World Economic constrained; resources, and the informal sector had;
Outlook Update is likely to show negative growth not been able to help absorb the shock as it had
rates even worse than previously estimated,” done in past crises, she said.
Gopinath said. The Fund also said the current crisis,
Gopinath said pent-up consumer demand could
which it dubbed the Great Lockdown, is “unlike
fuel a quicker rebound in hard-hit services, but this
anything the world has seen before.”
was not guaranteed since consumers might change
She said there were signs of early recovery in spending behaviour to minimise social interaction,
m any count ries that w ere reop e ning their and uncertainty could trigger higher savings rates.
economies, but new waves of infections and In China, one of the early exiters from lockdown,
reimposed lockdown measures still posed risks. the recovery of the services sector was lagging, with
While fiscal policy measures had been sizable in the hospitality and travel sectors struggling to regain
advanced economies, poor countries had more demand. BUSINESS LINE
Will Ensure Banks Pass On Rate Cuts : Finance Minster

Stop Seeking Government Help : CEA to Firms
Finance Minister Nirmala Sitharaman said the Private firms in the country need to fend for
Government is monitoring progress of various relief themselves instead of relying on government aid in
measures, especially the transmission of repo rate the quest to develop a self reliant India, said the
cuts to corporates and consumers to stimulate the Country’s Chief Econom ic Adv isor (CEA)
economy, hit by the Covid-19 crisis. Krishnamurthy Subramanian.
While interacting with the Managing Committee He was speaking on a virtual platform to the
Members of PHD Chamber of Commerce and Bharat Chamber of Commerce and Industries.
Industry through video conferencing, she said the Subramanian said, “Atmanirbhar Bharat or self-
government has always recognised the importance reliant India cannot just happen with domestic firms
of wealth creators as they generate employment asking for government help and support. They also
opportunities and utilise resources in an optimal need to work it out on their own.”
m anner f or p rom oting the soci o-econom ic
Various departm ents of the g ov ernm ent,
development in the country.
including department of commerce, department for
Sitharaman acknowledged that the p rime promotion of industry and internal trade, civil
minister has always facilitated a helping hand and aviation ministry and firms such as BSNL are issuing
recognised importance of MSMEs, an official policy directives or tweaking rules to push domestic
statement from the ministry said. m anuf actur ing . Measures like additional
permissions and licences for importing tyres have
PSBs disburse `21,029-Cr loans to MSMEs also been put in place.
under credit guarantee scheme
Aiming at import substitution, the prime minister
The Finance Ministry said that public sector
has rolled out a campaign to p ush domestic
banks (PSBs) have disbursed `21,028.55 crore
manufacturing. This is aimed at boosting the cash
under the `3-trillip n Em ergency Credit Line
position of firms during a time with falling demand.
Guarantee Scheme (ECLGS) for the MSME sector,
which is reeling under stress due to the lockdown. Subramanian said since India has the PDS

GENERAL
system, the country doesn’t need to directly transfer “health crisis unlike the economic crisis of 2008”
cash to the people to support them. “In the Jan Dhan stating that while measures are being taken to boost
accounts, it has been seen that people are saving demand, it is likely to remain muted until either a
more owing to the current uncertainty. If we give vaccine is found, or people develop “a faith to control
money to the people, it will only enhance their this pandemic”. "Unlike other sectors, health care
savings,” he said. is witnessing a surge in demand and it is getting
reflected in the prices which they are charging,” the
The official termed the ongoing crisis as a
official said. BUSINESS STANDARD
Reserve Bank of India May Allow One Off Recast of Stressed Loans
The Reserve Bank of India (RBI) may allow given that banks in the past used it to classify
banks to restructure company loans without having restructured loans as standard accounts and set
to set aside funds to cover potential losses as a aside low er p rov isions ag ainst them . This
one-tim e e xem p tion to ease the strain on incentivized restructuring rather than recognizing
businesses and lenders during the corona virus bad loans. That came to an end in 2015 when the
pandemic, a senior central bank official said. then governor, Raghuram Rajan, initiated an asset
quality review (AQR) of banks. During the course
Though banks are allowed to recast loans under
of AQR, RBI looked at the status of large corporate
guidelines set out in RBI’s 7th June 2019 circular,
accounts across banks, which revealed significant
they will be required to make higher provisions,
divergence between the
crimping their profits. A
A one-time recast of loans was a suggestion of the rep orted lev els of
one-time restructuring of
banking industry to help firms affected by the im pairm ent and actual
loans w as one of the
covid pandemic positions.
suggestions made by the
banking industry to help firms affected by the covid- This led to banks recognizing stressed accounts
19 pandemic. as non-performing assets (NPAs), resulting in a
surge in bad loan ratios of banks from 3.4% of gross
“The option is on the table... When and in what
advances in March 2013 to 4.7% in March 2015,
manner, we have to see,” the official said, adding
and further to 9.9% by March 2017.
that there were represen-tations against allowing
debt restructuring on the grounds that the ongoing RBI also asked banks to provide a minimum of
loan moratorium was sufficient, and that funds might 15% of the loan value of the restructured account
get diverted in a debt recast. to cover the risk of default, versus only 5% earlier.
Even though some businesses require more In 2019, RBI again allowed banks and non-
help than others, a debt recast, if allowed, has to b anking f i nancial com panies a one-tim e
be for all, the official cited above said on condition restructuring of loans of up to `25 crore to micro,
of anonymity, adding any debt recast has to come small and medium enterprises (MSMEs) that were
with “some conditions”. in default on 1 January 2019, without having to mark
them as NPAs.
An RBI spokesperson declined to comment on
Lenders are being given an extension of 15
the issue.
months (up to 31 March 2020) to classify these
RBI has been opposed to debt restructuring, stressed loans are standard.

GENERAL
Banks are asking for a similar restructuring provisions for all loans under the three-month
forbearance for other large accounts by exempting moratorium announced on 27 March and said banks
them from declaring these accounts as NPA. will get 90 more days to resolve assets under the 7
June 2019 circular. MINT
On 17 April, RBI asked banks to make 10%
8 Core Industries Output Contracts 23.4% in May, 2020

Contracting for the third month in a row, the products, steel, cement and electricity declined by
output of eight core infrastructure industries shrank 14%, 16.8%, 21.3%, 48.4%, 22.2%, and 15.6%,
by 23.4% in May, due to the corona virus induced respectively.
lockdown, according to an official data.
During April May 2020-21, the sectors output
The eight core sectors had expanded by 3.8% dipped by 30% as compared to a positive growth of
in May 2019 , the data 4.5% in the same period
released by the commerce Barring fertiliser, all seven sectors coal, crude oil, previous year.
and industry ministry on natural gas, refinery products, steel, cement, and
“In view of nationwide
Tuesday showed. electricity recorded negative growth
lock-down during April and
Barring fertiliser, all May 2020 due to Covid-19
seven sectors coal, crude oil, natural gas, refinery pandemic, various industries coal, cement, steel,
products, steel, cement, and electricity had recorded natural gas, refinery, crude oil etc experienced
negative growth in May. substantial loss of production,” the ministry said in
a statement. FINANCIAL EXPRESS
The outp ut of coal, natural gas, ref inery
Diesel Price Hike Pushes Freight Rates

Up by 15% on Trunk Routes
After being subdued for several months, freight
rates on key trunk routes have gone up by 10-15
per cent following a steep hike in diesel prices. It
even surpassed pre-lockdown rates, according to
the Indian Foundation of Transport Research and
Training (IFTRT).
The hike in diesel prices have a direct correlation

with the freight rates with fuel as a percentage
accounting for more than 65 percent of the variable
operating costs for transporters.
The increase in freight rates establishes the

March 1. Other routes also showed similar spikes.
correlation. As on June 26, freight rate for a round
trip to Delhi from Mumbai was up 16 per cent to “In some routes wherethe demand is strong, the
`1.05 lakh from `88,000 on June 1. It was even increase is as much as 20 percent,” said SP Singh,
higher than the rates seen before the lockdown. One senior fellow at IFTRT. “The manufacturers are
had to pay only `84,000 for a similar round trip on panicking as they don’t want inventory pile up and

GENERAL
are willing to pay more. First, they were not able to services,” said Balmalkit Singh, chairman of the core
produce due to the lockdown. Then, they weren’t committee at All India Motor Transport Congress.
sure of the demand. Now that demand is picking
Shamsher Dewan, vice-president and sector
up gradually, they don’t want to be saddled with
head, corporate ratings at ICRA, said, “The financial
stock and are therefore not complaining of high
viability of fleet operators has been under^ stress
freight rates,” he said.
due to the pandemic.” The hike in diesel prices and
“This (hike in diesel price) will not help anyone, low fleet utilisation left them with no choice but to
neither transporters nor users of the transport pass on the increase in cost.”
BUSINESS STANDARD

SPECIAL REPORT
Brands Preferences Remain Largely Unchanged
A consumer survey was carried out by Spintz to decipher the change (if any) in alcohol
consumption preferences from before lockdown to unlock phase 1 period, in the upwardly mobile
urban India. The idea was to understand how consumers reacted to non-availability or paucity
of their preferred brands and if they opted for any alternative brand/s. Interestingly, the survey
revealed that most of the respondents are inclined to stick to their preferred brands after the
reopening of the licfuor shops, even though the lockdown has exposed many of them to alternate
brands.
The survey, which covered high end professio- alternate brand.
nals and entrepreneurs across urban India, which
For a respondent who preferred Budweiser,
of course comprised metres and satellite cities (like
Kingfisher came across as an alternate beer brand.
Noida. Gurugram. etc.) revealed that there were
Conv ersely, f or another resp ond ent, w hose
instances of inconveniences to get the preferred
preferred beer brands are Kingfisher Ultra and
liquor brand/s in the initial phase of reopening of
Heineken, Budweiser emerged as the alternate
the retail liquor outlets. All the respondents were
brand. Another respondent who has Heineken,
consumers of alcoholic beverages through their
Budweiser and Carlsberg among his preferred
frequency of intake and monthly spend on alcoholic
brands opted for alternate brands like Yavira and
beverages varied.
Bad Monkey.
This scarcity of preferred brand/s perhaps had
By and large, Kingfisher, Bira and Budweiser
induced people to opt for alternative brands in the
emerged as preferred beer brands among the
initial phase of reopening of liquor shops. However,
respondents interviewed.
most of the respondents asserted that now that dust
has settled down and most of their preferred brand/ Surely, this was an opportunity for other brands
s being available, they would stick to their preferred to shine.
brand/s only.
What is interesting to note that for most of the
We can infer from this survey that by and large resp ondents their b uying choice s w ere not
Indian consumers are conservative with their buying influenced by the rising prices due to additional cess
choices as far as alcoholic beverages are concer- imposed by the Delhi and other state governments
ned and brand loyalty plays more weightage to them (which was later revoked by the Delhi government).
than prices. However, at the same time there is a But the predominant trend which emerged in the
little room for experimentation in their mind share. survey is that most of the respondents were inclined
to stick to their preferred brands in the post-
And what are the alternate brands? Well, they
lockdown phase.
varied from respondent to respondent in our survey.
For a person preferring single malts, Teacher’s and So we can infer that in the upper end of the
Rockford came across as alternate choices, while spectrum of the urban Indian society, where our
for a person preferring Johnnie Walker Red Label survey is largely focused on, the demand for
and Jack Daniel’s, brands like Golfer’s Shot. Black alcoholic beverage brands is not very elastic in
Dog and Blenders Pride were among the alternate character. However, the significant rising of prices
choices. Similarly, a person having Royal Stag as could easily lead to lower consumption of their
the preferred brand had W hite & Blue as his preferred alcoholic beverages brands.

SPECIAL REPORT
Overall, the survey helped us to gauge better sample size was 500, we are able to share only
the shift in consumer mood in terms of their alcoholic some of the responses here. The responses are
beverage choices among upper echelons of the presented in a reader-friendly manner, without
urban Indian society. This information can facilitate compromising on objectivity element. SPIRITZ
the industry players to better plan their marketing
strategy in these trying times. Though our suvery’s

TECHNOLOGY ABSTRACTS
ADVANCED BIOFUELS - POTENTIAL FOR

COST REDUCTION
INTRODUCTION This project used as its starting point a study on
Bioenergy already plays an important role in the the costs of advanced biofuels carried out within
global energy economy, and its expanded use is a the programme of work of the Sub-Group on
critical element in future low carbon scenarios, Advanced Biofuels (SGAB) (under the European
where it can especially play an important role in Commission’s Sustainable Transport Forum (STF))
reducing greenhouse gas (GHG) emissions from and published in 2017. The report on this study
the transport sector. Decarbonising transport will reviewed data available on the current costs of
require a range of bio-based transport fuels, and producing a range of advanced biofuels, based on
especially advanced low carbon fuels that are extensive contact with industry and other players
suitab le f or long-haul transp ort ap p lications active in the field.
including aviation. A num ber of ap prop riate
The aims of this project are to:
technologies to produce such fuels are being
• Update and extend the SGAB study to provide
developed and commercialised. However so far,
estimates of the current costs of producing a
their production has only reached a limited scale.
selection of relevant advanced biofuels;
The costs of these advanced biofuels are currently
• Identify the scope for cost reduction for these
higher than those of the fossil fuels that they can
advanced biofuels;
displace and of more conventional biofuels such as
ethanol from sugar or corn, or biodiesel. It is • Develop a model for likely cost reduction
therefore important to consider what scope there is progress as deployment grows;
to reduce the production costs of a range of • Compare these costs and cost trajectories with
advanced biofuels, and to identify under what likely trends in fossil fuel prices, and those of
conditions they could become affordable. conventional biofuels; and
• Examine the impact of policy measures,

including carbon pricing, on the economic in the current generation of demonstration and early
competitiveness of advanced biofuels. commercial plants. If a number of additional built, it
is anticipated that capital and operating costs could
Conclusions be significantly reduced, while scope for feedstock
Information gathered from industry and other cost reduction is judged to be more limited. Overall
sources for this study has largely confirmed the production costs could be reduced by between 5-
estim ates of the current costs of producing 27%, compared to the current cost estimates. In
advanced biofuels contained in the earlier SGAB addition, if increased experience makes it possible
cost analysis report. Costs lie in the range of 65- to finance plants on more favourable terms, which
158 EUR/MW h (17-44 EUR/GJ) for production would reduce costs further. For example, reducing
based on biomass feedstocks and 48-104 EUR/ the financing rate from 10% to 8% and extending
MWh (13-29 EUR/GJ) for waste-based production, the financing term from 15 to 20 years would further
illustrating the cost advantages of using waste reduce costs by some 5-16%. Taken together, these
feedstocks. This compares with a recent range of measures can reduce the production costs range
fossil fuel prices of 30-50 EUR/MWh (8-14 EUR/ for biofuels produced from biomass feedstocks to
GJ). between 42-119 EUR/MWh (12-33 EUR/ GJ) and
Early market opportunities exist for producing 29-79 EUR/MWh (8-22 EUR/ GJ) for waste-based
lower cost advanced biofuels from wastes, and fuels.
through integration of advanced biofuel production Large scale deployment of the technologies, in
with existing biofuels processing plants. However, line w ith t he patterns needed t o m eet the
such opportunities are relatively limited and will not ambitions for advanced biofuels within a number of
in themselves enable production at levels likely to low carbon scenarios, could lead to additional
b e needed to m eet low carb on scenario significant cost reductions through technology
expectations. learning, if plant capital and operating costs fall in
There is significant potential for cost reduction line with a learning curve. Such reduction could be
through R&D and through experience being gained sig nif icant g iv en larg e scale roll -out of the

technolog ie s (p otentially up to 50% f urther to 0-300 EUR/tonne CO2eq if the medium term cost
reductions in the most optimistic cases studied), reductions discussed above are achieved, and could
although given the range of complicating factors it be reduced further by cost reductions linked to
is difficult to estimate the scope for such reductions learning ef f ects stim ulated b y larg e-scale
precisely. deployment. In the longer term, the effective cost
of using fossil fuels may rise through a combination
As capital and operating costs fall, the feedstock
of higher prices and more extensive carbon pricing,
costs assume a greater importance in the overall
or other incentives may be available for low carbon
cost structure. It is difficult to predict feedstock cost
transport fuels. If there is an extensive increase in
and price trends, particularly in situations where
the production capacity of advanced biofuels at the
demand is significantly scaled up. While global and
scale envisaged within low carbon scenarios, then
regional studies indicate that significant quantities
there is the prospect of the technologies being cost
of wastes residues and energy crops could be
effective in the context of anticipated fossil and
available at roadside costs below 20 EUR/MWh (5.6
carbon prices such as those in the lEA’s World
EUR/GJ), more detailed studies are needed to
Energy Outlook scenarios.
confirm that feedstocks could p ractically b e
delivered at these costs taking all the logistical and While the costs of advanced bio-fuels and other
market factors into account. fuels discussed above are an important factor, a
broader range of issues also needs to be considered
Comparison of the estimates of the current costs
of production of the range of advanced biofuels with when comparing these and other low-carbon
options. These issues include:
the prices of the fossil fuels that they aim to replace
mates indicates a significant cost gap of between • The extent to which they can directly replace
40-130 EUR/MWh (11-36 EUR/GJ). If the medium- fossil fuels;
term cost reductions discussed above can be • The costs of any modifications or of distribution
achieved this gap could be narrowed, but it will still costs associated with the fuels;
be significant (except for some waste-b ased • The likely availability of feedstocks; and
projects).
• The life-cycle GHG emissions and other
Policy support will be therefore be needed to sustainability criteria associated with particular
enable these technologies to mature either in terms routes.
of added value for low carbon fuels or a substantial
Larg e-scal e dep loym ent w ill dep end on
carbon costs applied to fossil fuels. For biomass
based fuels a carbon price in the
range of 49-525 EUR/tonne CO2eq
w ould b e the risky and costly
dem onstratio n and early
com m ercialis ation of the
technologies, so as to bridge the
“valley of death”. Continuing strong
support will also be needed to offset
the differences needed to bridge the
current gap. This would be reduced

continuing policy support. First, industry will need In the longer term, there is further scope for cost
support during between biofuels and fossil fuel reduction due to learning effects, if there is an
prices, either by internalising external costs extensive increase in the production capacity of
associated with GHG emissions associated with advanced biofuels. There is the prospect of the
fossil fuel use or by incenti-vising low-carbon technologies being competitive in the context of
transport fuels. anticipated fossil and carbon prices. Large-scale
deployment will depend on continuing policy
Key Conclusions support. First industry will need support during the
Comparison of the estimates of the current costs demonstration and the risky and costly early
of production of the range of advanced biofuels with commercialisation of the technologies, so as to
the prices of the fossil fuels that they aim to replace bridge the “valley of death”.
indicates a significant cost gap. There is scope for
Continuing strong support will be needed either
medium term cost reductions of between 20-50%
via strong carbon price signals, or by incentivising
due to technical advances and improved financing
low carbon fuels.
term s. If t he m edium -term cost reductions
discussed above can be achieved the gap will be Cost is not the only issue!
narrowed but will still be significant for many of the
pathways.

EFFICIENT UTILIZATION OF ELECTRIC POWER IN
SUGAR MILLS AND DISTILLERIES.
1. INTRODUCTION aspect, as electric power is a by-product in the sugar
After generating electric power efficiently, the factories and is almost free. On the other hand, the
next effort should be to utilize the electric power industrial installations, depending on the public utility
efficiently. Electric power is mainly used in sugar companies f or ob taining their electric pow er
factories and distilleries for driving various electric requirements realised the need to reduce electric
motors used as drives for: power consumption, due to heavy bills received
from the public utilities and penalties levied for poor
a) Cane and beet unloading equipment,
power factor. By proper selection of the electric
b) Cane carrier and beet washers.
motors and their operation, improved power factor
c) Cane p repa ratory dev ices lik e, kniv es, and improved lighting practices, there is a possibility
shredders, fibrizers etc. of reducing the electric power consumption by 20
d) Milling p lants (sometim es, turb ines and to 50%, according to experts.
hydraulic drives) and diffusion plants.
Melvin H. Chiogioji 1 (Department of Energy,
e) Diff erent p um ps f or juice, w ater, syrup ,
Washington DC) has explained about the power
massecuites, molasses etc.
factor and its effect on electric power consumption,
f) Injection and spray water pumps.
as follows:
g) Centrifugal machines,
h) Crystallisers. 2. POWER FACTOR
i) I.D. and F.D. fans of the boilers. Power factor is the percentage of current in an
j) Conveyors, blowers, cleaning equipment, AC circuit which can be used as energy, and is the
workshop machinery etc. ratio of true power in kilowatts to apparent power in
k) Molasses, alcohol, effluents in distilleries. kilovolt amperes. The kilowatts, or “real power”,
performs the “real work” done by the electricity. The
Approximately, 90% of the total electric power
out of phase component, kilovolt ampere reactive,
consumption in a sugar factory or distillery is for
or “phantom power”, provides the magnetizing force
these drives and the balance 10% is used for
necessary for operation of the work performing
lighting , air conditioning of the office rooms,
device.
residential buildings etc. Hence, more attention
should b e paid to reduce the electric p ow er Figure 1 provides the relationship between KW,
consumption for the drives. KVAR, and KVA. The angle between the KW and
KVA vectors is known as the “phase angle” and is
Historically, electric power was cheap in the
used as a measure of the relative amount of KVAR
earlier years and hence, even the industrial units
of the system. The quantity known as “power factor”
interested in energy conservation did not pay proper
is simply the cosine of this angle.
attention to reduce electrical power consumption by
proper selection of the drives and controlling their As the amount of KVAR is decreased, the phase
operation and lighting installations. The sugar angle is diminished, and the magnitude of KVA
factories, which generally install power generators approaches that of the KW. When the phase angle
for meeting the power requirement of the various decreases to zero, power factor becomes 1.00 or
drives and lighting donot pay much attention to this 100%. At 100% power factor, KVA is equal to KW,

and all of the heating developed in the system is a power factor drops to as low as 0.5 at 25% load.
function of current that is actually performing
Additionally, there is a substantial range of
productive work. Low or “poor” power factor is
power factors in comparable commercially available
caused by use of inductive or magnetic devices,
motors, and larger units have better power factors
such as induction motors, transformers,. chokes for
than their smaller counterparts. This is shown in
fluorescent lights, and welding plants. The reactive
Figure No. 3.
current uses part of the capacity of the distribution
network, although it does no useful work.
A. Disadvantages of a Low Power Factor
Generally speaking , the pow er f actor for In the industrial installations, where electric
inductive motors falls as the mechanical load on power is purchased from a public utility company
the motor decreases; therefore, the aim should be (national grid or state electricity boards), particularly
to keep all motors almost fully loaded. Figure No. 2 in U.S.A., poor power factor penalizes the industrial
demonstrates this for a 20HP and 100HP motor by user of electricity in a variety of ways. First of all,
relating power factor to percent full load on the utilities typically penalize industrial customers for
motor. Of more interest is the relationship of power low power factors. In fact, it is the rule, rather than
factor to operating mechanical equipment. The the exception, for industrial power contracts to
figure shows that at very low load on a motor the specify minimum permissable power factor. Users
having power factors below 80-90% typically have
surcharges added to their bills. If the customer does
not bring this power factor up to the minimum in a
specified period of time, the power company will,
under som e p ow er contracts, p erf orm the
correction, bill the customer for the installation, and
charge a stiff monthly “rental” for the capacitors on
the electrical power bill. These penalties may
amount to thousands of dollars a month for large
industrial plants.
In additio n, p oor p ow er f acto r rob s the

distribution system of capacity that could be used
to handle work performing load and results in
currents higher than necessary to perform a given
job, thereby contributing to excessive voltage drop
and high system losses.
According to Hugot, the disadvantages of low

power factor in a sugar factory, which generates its
own power are as follows :-
a) Unsatisf ac tory utilisation of the p ow er

generator. The output of the alternator, which
produces electricity for the factory (in the power
house) is limited by the current I, which flows

through it. But, the useful power provided is leading power factor is very simply adjusted,
only proportional to I cos 0. Consequently, if and p rop e rly b alanced syst em s could
cos 0 = 0.4, the power that the alternator will theoretic ally use one hors ep ow er of
be able to produce will be only half that which synchronous motor to correct approximately
it could produce with a cos 0 = 0.8. If that has four inductive horsepowers. Good in theory. out
been forseen, it should have been necessary practice shows that synchronous motors are
to instal an alternator bigger than it should be. generally only available in 500 HP or larger
If not, the expected power will not be available. sizes. To aid in p ower factor correction,
b) Increase in the losses through the Joule effect moreover, they must be applied to continuously
in the lines; these losses are proportional to I. running loads.
c) Increase voltage drop in the alternator and the c) Use of a synchronous condenser: A synchron-
lines. ous condenser is a large piece of rotating
equipment which is similar to a synchronous
d) Decrease in the efficiency of the alternator,
motor. The synchronous condenser drives no
which can be more than 1%.
load; it merely functions to improve the power
B. Methods for Improving the Power Factor factor. Synchronous condensers are not a
The losses due to low power factor can be solution in industrial plants and are used mainly
corrected in the following manner as suggested by by electric utilities.
Melvin H. Chiogioji
d) Use of capacitors, the only practical method of
a) Proper selection of an electric motor to perform power factor correction. For a given cycle of
a particular duty, and operation of the motor at power supply, during the first quarter of the
close to full loads will improve the power factor, cycle, a capacitor absorbs power, while an
particularly in the case of induction motors. inductor emits power. This sequence reverses
during the next quarter of the cycle, reverses
b) Use of synchronous motors instead of or along
again in the next quarter cycle, and so on.
with induction motors. The characteristics of
Hence, a capacitor matched in capacity to the
synchronous motors are such that they can be
magnetic field of an inductive motor can supply
operated at unity or leading power factor. The
the reactive power required by a motor through
the phenomenon of continuous interchange of
energy between an inductor and. a capacitor.
This technique is the simplest and the most
v ersatile f or industrial p ow er f actor
improvement. Capacitors can be bought in
blocks and combined to provide the required
amount of capacitive reactance.
Capacitors (condensers) can be installed either

at the switch board, or preferably at the motors
responsible for low power factor and in particular,
the centrifug al m otors, so as to reliev e the
corresponding line connecting the switch board to

the centrifugals, which otherwise would remain 3. TYPES OF ELECTRIC MOTORS AND THEIR
overloaded. In this way, the power factor of that EFFICIENCIES
sector can be brought up to about 0-95. However, There are different types of electric motors with
according t o Hug ot, the draw b ac k of these different electrical characteristics, meant f or
condensers is that they are expensive and that they different duties in a sugar factory or a distillery.
create risks of boosting the voltage when the motors Some of these motors are as follows :-
are being switched on or off.
i) Synchronous motors,
ii) Asynchronous motors, which can be divided
C. Benefits of Power Factor Enhancement
into :
Melvin H. Chiogioji 4 has mentioned that in the
case of industrial installations obtaining power from a) Induction motors including induction
public utility company the major benefit of power motors with wound rotor and slip ring
factor correction is the power company’s providing squirrel cage induction motors.
attractive billing incentives, since the utility is faced b) Commutator motors.
with the same problem of reduced capacity as is Motors can range in efficiency from a low of 10%
the customer. The utility’s facilities distribution, in small devices to a high of 90% and above in large
transmission, and generation must be oversized to and special purpose industrial motors. Most of the
accommodate the reactive component. As a general industrial motors are rated in the 50 to 70%
rule, where power factqr is poor, capacitors can be efficiency range. Data collected by experts in this
installed for about one-fifth of the cost of distribution regard shows that the efficiencies of motors of a
facilities. What this means is that for every dollar g iv en size and typ e v ary w ide ly b etw een
spent for power factor improvement capacitors, five manufacturer to manufacturer and often different
dollars worth of distribution system KVA might to models of the same manufacturers too.
released. Capacitors should be installed at the
terminals of the offending loads, rather than for the Improvement in motor efficiencies can be
entire system, reducing current from this point all effected in the following manner :-
the way back through the plant distribution system i) designing the motor in such a way that it always
to and including the utility’s generator. operates at full load,
ii) using variable speed drives,
Additional benefits include the reduction in
iii) substituting more efficient motors.
system component sizing, including transformers,
major feeders, substations, and bus ducts. Power According to Federal Energy Administration
factor correction can also increase system capacity, (U.S.A.), the current and future motor efficiencies
and it can reduce power system losses, resulting in in integral H.P., polyphase motors are as shown in
im p rov ed v oltag e throug hout t he system . Table No. 1:
Furthermore, there is likely to be less load on
This data shows that the potential for improving
transformers serving motors, potentially increasing
motor efficiency varies considerably, depending on.
transformer life and decreasing the likelihood of
the size of the motor. The small size motors have
transformer failure. Power factor correction can offer
great potential for improvement of efficiency. This
longer motor life for those motors operating close
shows that with proper attention given for selection
to their nameplate current.
of correct type and size of motor, greater energy
efficiencies and economies can be achieved.

Hence, sugar factory and distillery personnel should substantially reduce energy consumption, and even
become more aware of and should install more improve system reliability, which in turn improves
efficient motors, when replacing old motors or while production. Variable speed drives are normally
installing new motors. suited for pumps rating of from 20 to 500 H.P., and
even larger. They make possible, energy savings
Synchronous motor has the advantage of
of as much as 57% in 100% frictional system
improving the power factor in a factory. But, it has
operated at 75% of design flow rate.
many other disadvantages and hence, it is not
normally used in a factory for improving the power How a variable speed drive can save energy,
factor, as there are better methods of improving the while driving a centrifugal pump can be explained5
power factor in a factory. with the following example:-
Induction motors are very commonly used for At a design operating point of 2,400 gal/min at
various duties in a sugar factory. The cost of such 3,500 rpm, the pump efficiency is 77.5% and the
motors is low and they are simple and call for less brake horsepower requirement is 550 HP. Changing
maintenance. So, this type of motor is used for the flow rate to 1200 gal/min without varying the
driving the centrifugal machines, pumps, cane p um p sp eed , w ill result in a horsep ow er
carrier etc. But, induction motors have a very low requirement of 400 HP and an efficiency of 63%. If,
power factor. Both efficiencies and power factor of however, the pump’s speed is altered to accomplish
induction motors vary with speed, power of the the flow reduction, only 70 HP is required and the
motor and load. As this motor is used for driving efficiency is 78%. Therefore, the variable speed
the centrifugals, which have changing loads and for drive provides a horsepower saving of 330 (400
driving pumps regulated by a valve on the discharge minus 70) and no loss in pumping efficiency.
side, by which load is variable, the power factor in
The other benefits to be gained from variable
a sugar factory is very low, of the order of 0.6 to
sp eed m otor driv e include a low er lev el of
0.7, instead of a normal of 0.8 and still more. The
mechanical noise at operating speeds, and longer
disadvantages of low power factor and the method
equipment service life, because the ‘soft’ startup of
of improving it have been explained in the earlier
variable speed drives reduces the shock of the peak
pages.
loading from single speed startups.
In the recent years, more and more use of
Keshava Prakash6 (of Kirloskar Electric Co, one
variable speed motors is becoming a common
of the leading manufacturers of electric motors in
feature in sugar factories and distilleries when
India) has pointed out that there will be considerable
energy conservation is aimed.
savings in the use of electric power by installing
Usually, pumps are installed with 10 to 15% variable speed motors to drive Toothed Roller
extra capacity (over design). Pumps driven by A.C. Pressure F eeders (TRPF), Rake Elev ator,
variable speed motors can handle such maximum Centrifugal machines and ID/FD fans. The net
conditions without consuming extra power (energy), power savings by using variable speed motors on
as in the case of conventional sing le speed the above equipment in a sugar factory are expected
centrifugal pump and throttling valve. Additionally, to be as follows :-
when flow rates range between 50 to 100% of
i) TRPF Drive — 20 to 30%
design, and atleast 50% of the pumping head
consists of friction loss, variable speed drives can ii) Rake Elevator — 10 to 15%

iii) Centrifugals — 50% residences, should be used only when it is essential,
iv) ID/FD Fans — 30 to 40% dep ending on the need, inorder to reduce
consumption of electric power.
Latest development in drives to save energy is
installation of ‘soft start-cum-energy saver’ drives. Artificial lights are necessary in the entire factory
They give a smooth start, stepless acceleration, building, workshops, laboratory, stores, offices,
reduced starting torque and current inrush. These residences and very large open area meant for
result in reduced wear of the equipment. Power parking of vehicles loaded with sugarcane or sugar
saving is accomplished by sensing motor load. This beet etc. Sugar godowns require artificial light
signal is fed back to a logic circuit, through power occasionally, when they are opened for storing or
semi-conductors, to adjust the voltage. Reduction delivering sugar. This shows that the type of light
in both kW and kVA are achieved by which, power required in different spots in a sugar factory is
consumption is reduced. different. The extent of illumination required in
different spots is different.
4. ENERGY CONSERVATION IN LIGHTING
According to Michael Grubb and John Walker 7,
It is a normal sight in many offices, stores,
the following three changes in lighting practice,
laboratory, workshop etc. to switch on the lights
made possible by advances in technology, offer the
during the daytime also, even though there is bright
g reatest p otential f or energ y sav ing , w hilst
sunlight outside the building. In order to save energy
maintaining lighting standards.
(electric power), it is of paramount importance to
make use of the natural light as far as possible i) A change from filament lamps to compact
during the daytime. Whenever a new building is fluorescent lamps.,
being constructed, the architect should design the ii) A change from mains-frequency fluorescent
windows and ventilators in such a fashion as to allow lighting to high frequency fluorescent lighting.,
maximum natural light into the rooms without direct iii) The introduction of systems of need-control of
sun rays falling on the workspot. The direction of lighting; that is, according to the need for light
the building also should be so adjusted (if possible) at a given place and time.
to allow maximum natural light into the rooms. In
the factory buildings also, the same principles may There have also been continuing improvements
be adopted and fixing large windows with glass in the eff iciency of f ilament lamps, like the
panels will allow natural light at the workspot. development of the tungsten halogen lamp, and
Transparent plastic corrugated sheets can be used improvements in efficiency and colour rendering of
in the roof to allow natural light into the factory and discharge lamps, in particular the metal halide lamp
workshop buildings. If necessary, baffles can be and the high-pressure sodium lamp. But, the
used to avoid glare by direct sunlight. It should be a greatest potential savings in energy are associated
principle not to use artificial lights during daytime w ith f luor escent lam ps, as th ey consum e
as far as possible in the offices, workshops, comparatively less power as compared to filament
lab oratory etc. How ev er, this cannot b e lamps for the same intensity of light. W hile the
implemented for sugar godowns, due to the danger efficacy of filament lamps remained at 12 lumens/
of glass panes or plastic sheets breaking and watt from 1960 to 1990, the efficacy of fluorescent
allowing rain water into the godowns. lamps has gone up from 75 lumens/watt in 1960 to
100 lumens/watt in 1990. Graph at Figure No. 4:
Air condit ion eq uip m ent in th e off ices, shows the improvement in the efficacy of different

types of lamps from their inception upto
1990.
It may be seen from this graph that

filament lamps have the lowest lumens/
watt (about 25 for tungsten halogen) and
the low pressure (LP) sodium lamp has the
highest lumens/watt (about 200) and the
others, like HP sodium, metal halide,
fluorescent, mercury lamps have lumens/
watt in between the two.
A. Compact Fluorescent Lamps

The physics of the fluorescent lamp
dictates that it should be long, typically over
one metre. In the past, shorter lamps
produced have had reduced efficiency and
have been restricted to low power and low
output. Continued research to reduce the
length of the fluorescent tube has resulted
in the development of compact fluorescent
lamps. These lamps have folded arc tubes
so that, their overall dimensions are close
to those of filament lamps. Some of the
compact f luorescent lamps recently
developed are shown in Figure No. 5:
Compact fluorescent lamps are about

4 to 5 times more energy efficient than
filament lamps, and they have a life of 8
times that of filament lamps. This means,
that considerable savings can be achieved
in both energy costs and maintenance
cost. Hence, the pay-back period of
compact fluorescent lamps is 2 to 3 years,
provided that they operate for a long
period in a year.
Compact f luorescent lamps have

ratings between 5 watt and 40 watts. They
fall into the following 2 categories :
i) Those with integral control gear and

a conventional BC (bayonet) or ES

(screw cap). These lamps are suitable to plug In ‘Daylink’, the lum inaires are regulated
straight into many luminaires, which previously automatically to top-up the daylight contribution. At
used filament lamps. The integral control gear any given moment, the electrical energy used is the
was originally mains-frequency, but a trend is minimum needed to bring the lighting to the required
developing towards integral high frequency level.
electronic control gear, with smaller lamp
With task-related regulation, the lighting level
dimensions and reduced weight.
is adjusted according to the need of each area. For
ii) Those, which are designed for operation on example, some areas require more lighting than
separate control gear: One type of lamp has a other areas and hence, task-related regulation of
two-contact cap with integral starter and is for light is necessary.
mains-frequency operation. Another type has
Both ‘Daylink’ and task-related regulation of light
a four-contact cap without starter: this allows
have been made possible on a large scale by the
more circuit options, such as operation on a
recent development of high-frequency regulation
high frequency ballast and in emergency
lighting, an extension of high-frequency fluorescent
lighting circuits.
lighting in which the electronic ballast adjust the light
Compact fluorescent lamps operate at a lower output and input power. By regulating the light output
temperature than filament lamps, which makes and energy consumption of fluorescent lighting
possible new designs of luminaire using less systems between 100% and a low level, high
material. freq uency regulation can p rovide sav ings in
electricity of upto 30% in addition to those provided
B. High Frequency Lighting
by high frequency operation, a total saving of about
Fluorescent lamps, such as the linear type
’50%, as compared with conventional fluorescent
normally used in offices, residences, shops etc. are
lighting.
usually operated at the frequency of the mains
electricity supply. But, their efficacy is increased, if Presence-detectors are devices using, for
they are operated at higher frequency. For example, example, infra-red radiation to detect whether
a lamp taking 50 watts on high frequency has the people are present in a given area. When a room
same light output as a lamp requiring 58 watts on has not been occupied for say, 10 minutes (to be
m ains-f req uency. The conv entio nal m ains- adjusted), the detector gives a signal to switch off
frequency ballast (50 or 60 Hz) is replaced by an the lighting. The lighting is switched on again
inverter circuit operating typically at 30 kHz. Ballasts automatically as soon as someone enters the room.
last much longer than individual lamps and the extra
Summing up, it may be mentioned that the three
cost of the high f req uency ballast is usually
principal developments in the energy efficient
recovered within the lifetime of the first lamp.
lighting are i) the move from filament lamps to
C. Need-Control of Lighting compact fluorescent lamps, ii) the move from
There are 3 principal opportunities for saving conventional fluorescent lighting to high frequency
energy by need-control of lighting: fluorescent lighting and iii) the move towards needs-
control of lighting.
i) Integration of lighting with daylight (‘Daylink’).
ii) Task-related regulation of lighting, Melvin H. Chiogioji has indicated the following
iii) Presence-detector control of lighting. house keeping or maintenance techniques, which

can be used to improve the efficiency of lighting luminaires used, or by adding new controls and
system in a factory :- associated equipment.
• Use more efficient lamps. In general, the lamp
• Turn out lights when they are not required.
that provides the most lumens per watt will be
• Reduce lighting by removing lights or installing
the most cost effective in the long run. The more
lower wattage bulbs. Guidelines to be followed
lumens a lamp produces from each watt of
are 50 foot-candles at inspection stations, 30
input, the more efficient it is.
footcandles in work areas, and 10 footcandles
in corridors, stairways, etc. 5. EFFICIENT UTILISATION OF ELECTRIC
• Install li g ht sw itches (esp e cially on POWER IN DISTILLERIES
incandescent lights and in coolers and freezers) In the distilleries, electric power is used for
to permit employees to turn out lights not being driving various electric motors used as drives for:-
used.
1. Molasses pumping from attached sugar factory.
• Make greater use of natural light by turning off
2. Pumping diluted molasses into fermentation
lights near windows when there is sufficient
tanks and recirculation.
light from the outside. ;
3. Pumping alcohol into storage tanks.
• Increase the illumination, where necessary, by
4. Surface aerators in the effluent treatment plant.
painting the room or area with lighter and more
reflective paints. All the above motors with the exception of the
• Reduce exterior and parking lot lighting levels. motors meant for driving surface aerators are very
In some instances, this may require increasing small motors and their power consumption is
security provisions. Consider time switches or neglig ib le. How ev er, the sam e princip les as
photoelectric cells to limit the burning time to explained in the earlier pages in respect of motors
the shortest term possible. used in the sugar factories should be adopted in
• Turn off or remove supplementary lighting, the distilleries also to ensure energy conservation.
such as decorative office lamps and drafting For ensuring energy conservation in lighting
table lamps, unless it is required by the specific also, the same house keeping and maintenance
task. techniques, as explained in the earlier pages in
• Reschedule janitorial work to regular shift respect of sugar factories should be adopted. But,
hours, in order to reduce lamp burning hours. unlike sugar factories, there is no need for yard
• Keep lighting fixture clean. lighting etc. in the distilleries and hence the electric
• Reorient work stations. Group tasks which power consumption for lighting is negligible in the
require the same lighting levels, and adjust the distilleries. However, as many distilleries purchase
light output of the system accordingly. Place electric power from the utility companies (state
work stations requiring the highest level of electricity boards), unlike sugar factories, which
illumination near windows to take advantage have their own power generation facilities, all care
of natural daylight. should be exercised to reduce power consumption
• Modify illumination level by changing the type as far as possible.
of lam ps used, b y chang ing the typ e of

BUSINESS STATISTICS
Consumer Price Index

We give below the Series of All India Average Consumer Price Index Number for Industrial
Workers (General) on the base year 1960=100 and 1982 = 100 and 2001 = 100 from
January 2019 to May 2020.
2019 2020
Month Base Base Base Base Base Base
1960 1982 2001 1960 1982 2001
January 7008 1421 307 7533 1528 330
February 7008 1421 307 7487 1519 328
March 7053 1431 309 7441 1509 326
April 7122 1445 312 7510 1523 329
May 7167 1454 314 7533 1528 330
June 7213 1463 316
July 7281 1477 319
August 7304 1482 320
September 7350 1491 322
October 7418 1505 325
November 7487 1519 328
December 7533 1528 330

BUSINESS STATISTICS
UP TO MAY, 2020
PRODUCTION OF ALCOHOL

BUSINESS STATISTICS
UP TO MAY, 2020
PRODUCTION OF ALCOHOL

ALL INDIA DISTILLERS' ASSOCIATION; NEW DELHI
UP TO MAY, 2020
EFFICIENCY DATA
AIDA News Letter July 2020

BUSINESS STATISTICS
73
74
ALL INDIA DISTILLERS' ASSOCIATION; NEW DELHI
EFFICIENCY DATA UP TO MAY, 2020
AIDA News Letter July 2020

BUSINESS STATISTICS
Postal Registration No:
DL(S) - 01/3120/2018-2020
Date of Publishing : By 25th of Every Month
Date of Dispatch : By 26/27th of Every Month
Registered with Registrar of Newspaper for
India Vide R.N.I. No. DELENG/2001/05436
"This Issue Edited, Printed and Published by V.N. Raina for

"All India Distillers' Association" 805 Siddarth, 96 Nehru Place, New Delhi-110049
Printed at : Plaza Press, 35/4-H, Connaught Place, New Delhi-110001

AIDA July 2020 Issue

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JULY 2020

Price : `350/- Per Issue+G.S.T. l Pages 76

ALL INDIA DISTILLERS’ ASSOCIATION

AIDA News Letter July 2020 3

4 AIDA News Letter July 2020

AIDA News Letter July 2020 5

6 AIDA News Letter July 2020

AIDA News Letter July 2020 7

8 AIDA News Letter July 2020

AIDA News Letter July 2020 9

10 AIDA News Letter July 2020

AIDA News Letter July 2020 11

12 AIDA News Letter July 2020

14 AIDA News Letter July 2020

Mills Look to Tap Molasses Export to Boost Cash Flow

AIDA News Letter July 2020 15

16 AIDA News Letter July 2020

AIDA News Letter July 2020 17

Sugar Prices in Maharashtra Firm Up by `100

18 AIDA News Letter July 2020

Sugar Production for 2020-21 Season Estimated at 30.5 MT: ISMA

AIDA News Letter July 2020 19

Sugar Production Till March 15, 2020 Dips 21%

20 AIDA News Letter July 2020

Sugar Demand Reaches Pre-Covid Level: ISMA

AIDA News Letter July 2020 21

Sugar Output Expected to Rise 12% in 2020-21 : ISMA

GLENCORE SUGAR REPORT

22 AIDA News Letter July 2020

Sugar Mills Get a Breather as Maharashtra Lifts

Maharashtra Mills Pay 97% Fair and Remunerative Price

The data released by the Sugar Commissioner BUSINESS LINE

Maharashtra Sugar Output Forecast Revised to

AIDA News Letter July 2020 23

Uttar Pradesh Sugarcane Farmers Demand

24 AIDA News Letter July 2020

AIDA News Letter July 2020 25

26 AIDA News Letter July 2020

Relaxed Import Norms for Australian Malt Barley

AIDA News Letter July 2020 27

Bimber Unveils New Single Malt Whiskies

English Whisky Launches 11 Year Old

55 Year Old Whisky from Japan to be Sold at An Astonishing Price

28 AIDA News Letter July 2020

New Gin Liqueurs from Bombay Sapphire

Lunar Gin from William Grant & Sons

AIDA News Letter July 2020 29

India Advances in Scotch Whisky Imports Over the USA

Live Online Auction of Cask Whiskies

30 AIDA News Letter July 2020

CSD Puts Imported Liquor Orders On Hold

Defence Canteens Scrap Orders for Scotch Whisky

AIDA News Letter July 2020 31

32 AIDA News Letter July 2020

AIDA News Letter July 2020 33

GST Council May Look at Rationalising Rates

GST Council Borrowings for Compensation Needs

Late Fee for Non-Filing of GST Returns Cut Sharply

34 AIDA News Letter July 2020

Government Caps Late Fee for GST Filing at `500

AIDA News Letter July 2020 35

Liquor Shops for Women in Madhya Pradesh

36 AIDA News Letter July 2020