8216;Implement sugar package in 10 days8217;

The government on Tuesday directed public sector banks to implement a sugar package that involves provision of interest free loans to sugar mills, and submit a report in 10 days. 8220;In the next 10 days the package will be implemented for all sugar mills, which apply under the scheme,8221; finance minister P Chidambaram told reporters here after meeting the heads of public sector banks. The Centre had, in December, notified the package that would allow sugar mills to avail of interest free loans for clearing cane price arrears of the 2006-07 and 2007-08 sugar seasons. The sugar year runs from October to September. Chidambaram said Punjab National Bank, Indian Bank and Indian Overseas Bank have already implemented the package. 8220;PNB has given me a list of sugar companies for which it has implemented the package,8221; he said, adding that other banks have been advised to complete the exercise by February 22.

The minister also said that the banks will have to submit the final report to the government by that date about how many sugar mills have been given the credit facility. The Government has said that mills would have to repay the loan in four years, including a moratorium of two years. Banks are expected to provide loans equivalent to the notional central excise duty payable by sugar mills on total output of sugar during the 2006-07 and 2007-08 sugar seasons. The government would give full interest subvention to all scheduled commercial banks, regional rural banks and co-operative banks for the total duration of the loan.