SWEETENING THE deal for sugar barons from the cooperatives sector, the Uddhav Thackeray government on Wednesday diluted its own norms regarding issuance of state guarantees to mills.
The state Cabinet, which accepted the dilution of norms during its meeting, argued that the move was aimed at improving the liquidity of the cash-starved sugar industry. Incidentally, 18 of the ministers in the Shiv Sena-NCP-Congress government have direct links with cooperative sugar mills.
The Cabinet also cleared a proposal for the issuance of a Rs 6 crore in bank guarantee to Bhor-based (Pune) Rajgad Sahakari Sakhar Karkhana (SSK), which is led by senior Congress MLA Sangram Thopte.
Almost immediately after the Uddhav government was sworn in on November 28, Thopte’s mill had raised a demand for grant of Rs 12 crore in government guarantee to raise a loan from the Maharashtra State Cooperative (MSC) Bank for the ongoing crushing season. Last December, the government had issued a “conditional” guarantee to the mill, following which a loan of Rs 6 crore was obtained. On Wednesday, the Cabinet relaxed some of the conditions it had imposed.
With the bureaucracy pointing out to several past cases where the government guarantee was invoked by the bank owing to the default of the sugar mills, Uddhav has, however, insisted that “all directors (of such units) would need to furnish personal guarantees to avail such loans”.
A senior minister said, “The proposal for extending a further guarantee of Rs 6 crore to Rajgad SSK was approved (by the Cabinet) only after the mill submitted such personal guarantees.”
While a proposal to issue a similar guarantee of Rs 30 crore to NCP MLA Bharat Bhalke-promoted Shree Vitthal SSK (Pandharpur) was also discussed during the meeting, sources said that a final nod has been deferred since the Pandharpur mill is yet to issue the personal guarantee bond of its directors.
The state cooperatives department had earlier imposed other stringent conditions, which included tagging of the guarantee amount to the current crushing season, and making it binding on sugar mills to make payments towards the loan from the proceeds of the season. But these were relaxed on Wednesday.
Rajgad SSK had earlier also obtained a letter from the MSC bank, contending that the “conditions” imposed by the government for extending the guarantee were not in keeping with the National Bank for Agriculture and Rural Development.
According to official records, cooperative sugar mills in Maharashtra have so far availed government guarantees worth over Rs 1,374 crore. Proposals seeking another Rs 1,619 crore in guarantees are pending. The previous Devendra Fadnavis government had adopted a policy of not extending guarantees to sugar mills, and had cited the mounting debt and rising contingent liabilities on the public exchequer for doing so.
Cabinet defers final nod for land to Pawar-chaired trust
A week after it had approved a controversial proposal of alloting public land of 51.33 hectare — originally acquired for a state seed farm — in Marathwada’s Jalna to NCP president Sharad Pawar-chaired public trust Vasantdada Sugar Institute, the Cabinet deferred the confirmation of minutes regarding the approval. Three state departments — revenue, finance and law — had earlier questioned the validity of the move, but the Cabinet, which included five ministers who are among the institute’s trustee, had overruled their objections.
Speed up work: CM to ministers
Facing flak from certain quarters for the slow pace of governance, Chief Minister Uddhav Thackeray on Wednesday asked his ministers to speed up works and implementation of projects in their respective departments. On Wednesday, after official proposals placed before the Cabinet had been cleared, the CM asked the bureaucrats to leave, and had an hour-long discussion with his ministers. Sources said the implementation of the common minimum programme finalised by the ruling parties was also reviewed.
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