A cost effective and environment friendly highly efficient ethanol based fuelcomposition preferably as a bio-fuel and its process of manufacture thereof. Advantageously, the bio-fuel can be derived from natural renewable , readily and abundantly available sources of Madhuca indica ,Madhuca Latifolia and Madhuca Longifolia fruits and flowers without the involvement of harmful chemicals in its process of extraction or employment of costly methods of molecular sieving and involves a synergistic combination of ethanol-water most preferably 80% ethanol and 20% water.Importantly, the cost-effective bio-fuel is favourably adapted to run engines involving ethanol based fuel without requiring extensive purification and giVing synergistically improved even better comparable performance of the engine when run on cost-extensive petrol and 100 % ethanol.
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