New Delhi, December 20: In a bid to assist the ailing sugar mills pay their debt to the cane farmers, the Cabinet Committee on Economic Affairs (CCEA) had approved Rs 6,600 crore interest free loans, informed Food Minister K.V. Thomas on December 19.
As part of the relief scheme, bankers were likely to lend equivalent to the excise duty paid by mills in the last three years, while the entire interest of 12 per cent would be borne by the Centre and the Sugar Development Fund, reports Business Line.
The Information and Broadcasting Minister Manish Tewari further added that, the CCEA has also approved the exports of sugar without any quantitative restriction. "This (decision) is expected to give a positive signal to exporters and the international community on the efforts of the government to pursue a stable, long term and consistent export policy regime in the agriculture sector," the CCEA said in a statement.
Earlier, a government panel headed by Agriculture Minister Sharad Pawar had recommended providing interest free loan to the mill owners to initiate sugarcane crushing in the current season started from October. The millers were already under debt of Rs 3,400 crore from last year, payable to the farmers. Because of high cane cost, they were reluctant to start fresh crushing owing to bearish trend in sugar prices in the international market.
Hailing government’s decision, Abinash Verma, Director General of the Indian Sugar Mills Association said, “The loans will help the industry reduce around Rs 500 crore annually of interest burden in the next five years. The industry eagerly waits for the Government’s help to reduce some of the surplus sugar stock as well as take immediate steps to rationalise cane pricing policy. Those can further help the sugar sector come out of the current financial crisis.”