Rs 8,000 Crore Package For Sugar Industry On The Anvil, Food Minister Paswan Says
The government will soon announce a bailout package of Rs 8,000 crore for the sugar industry to ensure the cash-starved mills clear cane dues of Rs 22,000 crore, Food Minister Ram Vilas Paswan said today.
A bailout package has been worked out days after the Bharatiya Janata Party lost the Lok Sabha bypoll in the Kairana constituency of Uttar Pradesh, the country’s largest sugarcane producing state.
“A proposal of Rs 8,000 crore has been sent to the Cabinet,” Paswan told reporters while highlighting his ministry's achievements in the last four years. He added that a decision in this regard may be taken very soon but declined to give more details. Paswan also refuted suggestions that the package is linked to results of the recent by-elections, especially in Uttar Pradesh.
The Union Cabinet is scheduled to meet tomorrow, sources told PTI.
The bailout package was proposed after the financial health of sugar mills worsened due to a sharp fall in prices following a record sugar production of over 31.6 million tonnes so far in the 2017-18 marketing year (October-September). It includes creation of a sugar buffer stock of 3 million tonnes, interest subsidy on Rs 4,500 crore loan to mills for expansion and creation of new ethanol capacity.
Last month, the government had announced a Rs 1,500 crore production-linked subsidy for sugarcane farmers to help millers pay cane payments. Presently, the average ex-mill price of sugar is in the range of Rs 25.60-26.22 per kg, which is below the cost of production.
The Centre has already doubled sugar import duty to 100 percent and scrapped export duty to check sliding domestic prices. It has also asked mills to export 2 million tonnes of sugar.