Sugar industry bailout to clear only 40% of cane arrears
08 June 2018
The union cabinet on Thursday approved a number of measures, with a total outlay of Rs7,000 crore, to address the liquidity issues of sugar mills and enable payment of accumulated arrears to farmers. Arrears to farmers stand at record Rs22,000 crore as on May 2018.
- The minimum domestic selling price of white / refined sugar to be fixed at the mill gate, initially at Rs29 per kg, which can be revised subsequently based on revisions in fair and remunerative prices (FRP) and other considerations.
- Creation of buffer stock of 30 lakh tonne for a year, entailing an estimated expenditure of Rs1,175 crore, towards inventory carrying cost, and quarterly reimbursement to be credited to farmers' accounts against mill arrears.
- To augment distillery capacity through upgradation and setting up new ones, the government will bear a maximum interest subvention of Rs1,332 crore over five years (including a one-year moratorium) on bank loans of Rs4,440 crore, to be sanctioned over three years based on a scheme formulated by the Department of Food and Public Distribution.