Sugar industry gets bailout package

Rs 7,200 crore will be the loan provided by banks to the sugar industry. It will be used exclusively for payment of sugarcane and the interest portion of the loan will be borne by the Government of India and Sugar Development Fund SDF. Interest subvention will be provided for 12 per cent. Of this,7 per cent will be from the SDF,while 5 per cent from the Government of India, Pawar told reporters briefing about the bailout package agreed during the meeting.

This bailout package is expected to ease the liquidity crisis with sugar mills that threatened to snowball into a political crisis with mills saddled with sugarcane dues of farmers delaying crushing,resulting into agitations from farmers. The sugar industry was reeling under financial crisis arising out of cane arrears to the tune of Rs 3,400 crore from 2012-13 season.

While the decision will help sugar industry avail loans as working capital for crushing operations,the meeting also recommended a slew of other measures to help sugar industry tide over the challenges. The measures included restructuring of loans to the sugar mills and incentivising production of raw sugar while setting up a buffer stock of sugar.

Additionally,the meeting favoured doubling ethanol-blending in petrol to 10 per cent levels. There was a demand to increase ethanol-blending from 5 per cent to 10 per cent. That has been accepted by the group, Pawar said.

Curated For You

Shark Tanks Ritesh Agarwal reacts to Virat Kohli choosing a Rs 2,058 cr Indian sportswear company over Pumas Rs 300 cr deal: This is a sign that

Im not joking: Google engineer stunned after AI coding tool builds in 1 hour what her team spent a year on

Anurag Kashyap heaps praise on Dhurandhar while disagreeing with its politics: Aditya Dhar is a Kashmiri Pandit who has suffered