Explanation:

• The government has notified a "modified" scheme to provide financial assistance to distilleries producing first-generation ethanol from feedstocks, including cereals.
• The assistance will be given for capacity expansion, setting up of new ethanol distilleries or converting molasses-based distilleries to dual feedstock.
• Under the scheme, the government will bear interest subvention for five years, including one-year moratorium against the loan availed by project proponents from banks at 6 per cent per annum or 50 per cent of the rate of interest charged by banks whichever is lower, for setting up of new distilleries or expansion of existing distilleries or converting molasses-based distilleries to dual feedstock

Hence option 3 is correct