‘Govt to take call on Rs 7,200-cr bail-out for sugar sector soon’
12 Dec 2013 11:24 PM GMT
Food Minister K V Thomas on Wednesday said that the government is likely to take a final call before this Christmas on a bailout package for the sugar industry that includes Rs 7,200 crore of interest-free bank loans to pay dues to sugarcane growers.
The minister commenting on the time period when the government would take a final call on the proposed relief measures said, ‘Most probably before Christmas, we are doing it fast. Our department is preparing a note and before taking it to the Cabinet, we will again discuss in the meeting of the informal group of ministries (GoM).’
Thomas said that it has been decided that loans worth Rs 7,200 crore would be provided by banks to the sugar industry exclusively for payment of sugarcane producers. Banks will lend equivalent to the excise duty paid by mills in the last three years, while the entire interest of 12 percent would be borne partly by the government and the Sugar Development Fund.
He also said that mills would have to repay the loans in five years and can avail of a moratorium on repayment in the first two years. Besides interest free loans, the panel had also recommended recasting of loans taken by mills as per RBI norms, incentives to produce 4 million tonnes of raw sugar and setting up of buffer stock, besides doubling ethanol-blending in petrol to 10 per cent.
Expressing concern over present problem of profitability and cash flow and payment to the farmers he said that sugar mills need to diversify their product mix to come out of it. Department of Food & Public Distribution has recently submitted a report on the ways to enhance the sugarcane productivity and sugar recovery in the country. Implementation of the recommendations would certainly help the sugarcane growers and mills to make the industry more vibrant, he asserted.
The minister commenting on the time period when the government would take a final call on the proposed relief measures said, ‘Most probably before Christmas, we are doing it fast. Our department is preparing a note and before taking it to the Cabinet, we will again discuss in the meeting of the informal group of ministries (GoM).’
Thomas said that it has been decided that loans worth Rs 7,200 crore would be provided by banks to the sugar industry exclusively for payment of sugarcane producers. Banks will lend equivalent to the excise duty paid by mills in the last three years, while the entire interest of 12 percent would be borne partly by the government and the Sugar Development Fund.
He also said that mills would have to repay the loans in five years and can avail of a moratorium on repayment in the first two years. Besides interest free loans, the panel had also recommended recasting of loans taken by mills as per RBI norms, incentives to produce 4 million tonnes of raw sugar and setting up of buffer stock, besides doubling ethanol-blending in petrol to 10 per cent.
Expressing concern over present problem of profitability and cash flow and payment to the farmers he said that sugar mills need to diversify their product mix to come out of it. Department of Food & Public Distribution has recently submitted a report on the ways to enhance the sugarcane productivity and sugar recovery in the country. Implementation of the recommendations would certainly help the sugarcane growers and mills to make the industry more vibrant, he asserted.
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