The sugar industry should diversify its production and focus on ethanol to remain economically viable, Nationalist Congress Party chief Sharad Pawar said on Saturday. He was addressing a gathering at Sangli in western Maharashtra where he welcomed local leader Shivajirao Naik back into the NCP fold after the latter quit the BJP.

"We cannot have only sugar production. We should opt for ethanol production. It is a good idea to set up a distillery in sugar factories," the former Union agriculture minister said. The Union government too has announced a policy to encourage ethanol production, Pawar added. Ethanol, a byproduct of sugar mills, can be used to mix with petrol and has several industrial uses.