The Standing Committee on Rural Development, in its report on the demands for grants of the land resources department, noted that the bio-fuels programme was started in 2003 and "in-principle" approval had been given for "demonstration phase" involving plantation over 300,000 hectares of bio-diesel producing non-edible oilseeds (jatropha and pongamia) on degraded forest and waste land.
"The committee are perturbed to note that there is inordinate delay in finalisation of bio-fuels programme," it said.
The report, which was presented to parliament May 2, said the entire programme has been engulfed in a prolonged debate on the issue of its viability among the department concerned, the Cabinet Committee on Economic Affairs (CCEA), a group of ministers (GoM) and The Energy Research Institute (TERI).
"The outcome of this long debate has not only consumed a decade of uncertainty on the issue, but also the entire programme is shrouded in mystery," the panel said.
It noted that funds have not been allocated for bio-fuels programme in the current fiscal (2012-13) as the decision on its future "has been pending for long."
"The department has informed that assessment report submitted by TERI is so negative that there is no scope for going in for further demonstration of jatropha plantation in the country. It has further been informed that it is now for union cabinet to take a decision in the matter...The department should place the matter before the union cabinet at the earliest for taking a conscious decision on continuance or otherwise of the bio-fuels programme," the panel's report urged.
A senior official of the department told the panel that a study by TERI had found the programme to be financially unviable.
"The TERI study had informed that when a plantation is grown on wastelands or un-irrigated lands, the energy we get back is not commensurate with the expenditure that has gone for plantation. So they are saying that it is not economically viable and it is not possible for India to convert agricultural land into jatropha-growing land because we will face a very acute food security problem. This position is before us and we have to take a very conscious decision," the official told the panel.
The Planning Commission had set up a committee on development of bio-fuels, which in its report in 2003, recommended launching a national commission on bio-diesel.
A proposal for establishing a National Mission of Bio-Diesel, with approval of the expenditure finance committee in 2006, was placed before CCEA which referred the matter to the GoM headed by the union agriculture minister.
The GoM met in February 2009 and gave "in principle" conditional approval for the establishment of the mission.
The recommendations were submitted to the cabinet by the new and renewable energy ministry and it gave conditional approval to the programme to take up to 300,000 hectare plantation of bio-diesel producing, non-edible oilseeds species on degraded forest land subject to receipt of positive feedback of the assessment of the plantation work already carried out in the country.
The union cabinet had approved the implementation of national policy on bio-fuels in 2008. The policy proposed an "indicative target" of 20 percent blending of bio-fuels, both for bio-diesel and bio-ethanol by 2017.