State Sugar Commissioner Shekhar Gaikwad said he will go through the sales record of sugar mills that are suspected of selling below the government declared Minimum Support Price (MSP) of Rs 3,100 per quintal. The focus of the exercise would be on sales deals that took place right after the MSP was raised in the first week of March, Gaikwad told The Indian Express.
Most of the mills have failed to meet their sales quota for March but some of the mills have reported above 70 per cent sales, said officials of the sugar commissionerate, adding that they will audit the financial records of these mills. Mills that have sold sugar at rates below the MSP will face action under the Essential Commodities Act, 1955.
Gaikwad, who called a meeting of the chairmen and managing directors of sugar mills in Pune on Thursday, has warned of action against individual directors. The mills that have sold sugar below the MSP may also not be allowed to sell the commodity for six months.
In February, the central government had increased the MSP of sugar from Rs 2,900 per quintal to the present rate of Rs 3,100, in a bid to resolve the crisis in the industry caused by higher production costs and lower sales price. But the increase in MSP has not helped mills much as they are facing low demand. To generate liquidity and pay off the Fair and Remunerative Price to cane growers, some of the mills allegedly sold sugar below the MSP, even after the central government’s announcement.
Commissionerate officials say they have heard about cases in which sugar mills and traders enter a formal agreement of purchase at Rs 3,100 per quintal and the payment is done via cheque. After the sale is made, the mill returns part of the amount in cash to the traders, which is not reflected in the accounts book.
Some mills allegedly finalise tenders at MSP but when the final settlement is made, the trader only makes a partial payment. “Some part of the amount is entered as balance payment, but it is never settled,” said an officer.
Maharashtra’s sugar production has crossed 104 lakh tonnes, with officials of the sugar commissionerate claiming the final figure may cross the projected figure of 106 lakh tonnes.