Private sugar millers in the state have decided to take legal action against the state government for failing to extend subvention owed to them under a central government scheme.
President of the West Indian Sugar Mills Association (WISMA) Bhairavnath B Thombare said the total cumulative interest the state government owes to the mills is around Rs 550 crore.
In 2014-15, the central government had come up with a soft loan scheme for the sugar sector given the drastic fall in sugar prices.
Mills had defaulted in the payment of the basic Fair and Remunerative Price (FRP) and the soft loan scheme of Rs 2,000 crore was to help them clear their cane dues. The scheme had seen mills getting the loan at 10 per cent interest for a period of five years. The central government was to pay the interest for the first year and the state government was to chip in for the next four years
However, Thombare said the state government has refused to extend the subvention to private mills. “They have relied on a 2010 Bombay High Court judgment while doing this. The judgment was related to the establishment of new sugar mills and could not be linked to the interest subvention scheme,” he said.
Moreover, the original government resolution has included both private and cooperative mills for the scheme.
“If the private mills were debarred from the scheme, why did the original GR refer to that?” he asked. The matter has been challenged in the Bombay High Court.
Meanwhile, sugar prices have improved slightly as demand for the sweetener has picked up in the open market. Thombare said this is because of the emptying of the stock accumulated at the trader end.
The mill price of sugar is still at the Rs 3,100 per quintal mark, which is the minimum selling price of the commodity as declared by the government. Thombare also said the problem of below-MSP selling has come under control, which has helped the sector a lot.