Cabinet nod for Rs 6000 cr interest free loan to sugar mills for paying farmers
Updated: Jun 10, 2015 04:03:01pm
New Delhi, June 10 (KNN) In a bid to help the cash starved sugar industry, Cabinet has decided to provide soft loans to the extent of Rs 6000 crore to the sugar industry.
“The Cabinet Committee on Economic Affairs chaired by the Prime Minister, Narendra Modi today approved the proposal to provide soft loans to the extent of Rs. 6000 crore to the sugar industry,” CCEA said in a release.
CCEA has provided a one year moratorium on this loan, and will bear the interest subvention cost to the extent of Rs 600 crore for the said period.
To ensure that farmers are paid their dues expeditiously, the Government has mandated that banks will obtain from the sugar mill, the list of farmers with bank account details to the extent cane dues are to be paid, so that the same are directly paid into the account of the farmers on behalf of the sugar mills. Subsequent balance if any, will then be credited into the mill account.
Furthermore, in order to incentivize the mills to clear their dues, CCEA has also decided that the approved soft loans will be provided to those units which clear at least 50 per cent of their outstanding arrears before June 30, 2015.
In the current sugar year (Oct 20014-Sept 2015), the cane price arrears are approximately Rs. 21,000 crore.
The Government has also fixed remunerative prices for ethanol supplied for blending with petrol. It has dismantled the tender based price discovery procedures for ethanol and fixed attractive prices for ethanol supplied for petrol blending.
Prices were fixed at Rs.48.50 to 49.50 per litre depending on distance from the depot thereby effectively giving Rs.42 per litre to the mill as against Rs.32 per litre last year. As a result, the supply levels of ethanol, which were about 32 crore litres per year, shot up to a level of 83 crore litre per annum.
It has also been decided to waive the excise duties on ethanol in the next sugar season to further incentivize ethanol supplies for the blending program. This would further increase the ex-mill price of ethanol and help improve the liquidity of the industry and enable them to clear the cane price arrears.
Government has also increased the import duty to 40 per cent, and abolished the Duty Free Import Authorization Scheme. To prevent possible leakages of sugar in the domestic markets, the Government has also reduced the export obligation period from 18 months to 6 months under the Advanced Authorization Scheme. (KNN Bureau)
“The Cabinet Committee on Economic Affairs chaired by the Prime Minister, Narendra Modi today approved the proposal to provide soft loans to the extent of Rs. 6000 crore to the sugar industry,” CCEA said in a release.
CCEA has provided a one year moratorium on this loan, and will bear the interest subvention cost to the extent of Rs 600 crore for the said period.
To ensure that farmers are paid their dues expeditiously, the Government has mandated that banks will obtain from the sugar mill, the list of farmers with bank account details to the extent cane dues are to be paid, so that the same are directly paid into the account of the farmers on behalf of the sugar mills. Subsequent balance if any, will then be credited into the mill account.
Furthermore, in order to incentivize the mills to clear their dues, CCEA has also decided that the approved soft loans will be provided to those units which clear at least 50 per cent of their outstanding arrears before June 30, 2015.
In the current sugar year (Oct 20014-Sept 2015), the cane price arrears are approximately Rs. 21,000 crore.
The Government has also fixed remunerative prices for ethanol supplied for blending with petrol. It has dismantled the tender based price discovery procedures for ethanol and fixed attractive prices for ethanol supplied for petrol blending.
Prices were fixed at Rs.48.50 to 49.50 per litre depending on distance from the depot thereby effectively giving Rs.42 per litre to the mill as against Rs.32 per litre last year. As a result, the supply levels of ethanol, which were about 32 crore litres per year, shot up to a level of 83 crore litre per annum.
It has also been decided to waive the excise duties on ethanol in the next sugar season to further incentivize ethanol supplies for the blending program. This would further increase the ex-mill price of ethanol and help improve the liquidity of the industry and enable them to clear the cane price arrears.
Government has also increased the import duty to 40 per cent, and abolished the Duty Free Import Authorization Scheme. To prevent possible leakages of sugar in the domestic markets, the Government has also reduced the export obligation period from 18 months to 6 months under the Advanced Authorization Scheme. (KNN Bureau)
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