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Finally, 32 mills get Maharashtra govt guarantee, but owners say measure may have come too late

The state government has been deliberating on pleas by cooperative sugar mills -- to extend guarantees to help them raise funds -- since March this year.

Written by Parthasarathi Biswas | Pune | October 10, 2020 10:12:56 pm
Maharashtra sugar mills, sugar mills Maharashtra, Maharashtra govt sugar mills, India news, Indian ExpressThe Maharashtra State Cooperative Sugar Factories Federation had asked for over Rs 1,000 crore by way of guarantees.

After multiple deliberations since March, the state government has finally chosen 32 sugar mills which will be eligible for receiving government guarantees to raise short-duration funds for the 2020-21 sugarcane crushing season. While the state government will distribute guarantees worth Rs 516.30 crore in the next few days, most mill owners complain that the measure is too little, too late.

The state government has been deliberating on pleas by cooperative sugar mills — to extend guarantees to help them raise funds — since March this year. The Maharashtra State Cooperative Sugar Factories Federation had asked for over Rs 1,000 crore by way of guarantees. The short-term loan was to be used by mills for repair and maintenance work before crushing season starts.

After multiple committees discussed the issue and handed over their reports, the state government on Saturday issued a government resolution granting guarantees to 32 mills. The guarantees will entail an additional ‘tagging’ of Rs 250 per quintal of sugar sold by the mills. The mills are expected to repay the loans they raise on the basis of guarantees before the start of the 2021-22 crushing season, ie before September 30, 2021.

However, the chairman of a sugar mill whose name has featured in the list said this guarantee was supposed to be used to fund pre-seasonal maintenance work.. “The crushing season is expected to start on October 15, so what would be the use of this guarantee now?” he asked.

“The GR has stringent conditions and the additional tagging of sugar would leave precious little for mills… With sugar prices expected to be weak, this would be mean additional difficulty in paying the mandatory fair and remunerative price to farmers,” he added.

Meanwhile, state Sugar Commissioner Shekhar Gaikwad has issued 75 crushing licences to mills which have cleared 100 per cent of their cane dues.

“Maharashtra’s payment history is satisfactory, with mills clearing more than 99 per cent of their dues. We have made it clear that without 100 per cent clearance of dues, crushing licences would not be issued,” he said.

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