Beleaguered UP sugar mills seek sops from Akhilesh govt

The mills demand withdrawal of entry tax on sugar and complete de-reservation of molasses

Reeling under sugarcane arrears of over Rs 5,000 crore, the beleaguered Uttar Pradesh private mills have demanded urgent sops from the Akhilesh Yadav government.

As urgent measures, the mills have demanded the withdrawal of entry tax on sugar and complete de-reservation of molasses.

Additionally, they sought remission of Rs 3/quintal in cane society commission out of the society commission of Rs 5.10/quintal and cash subsidy of Rs 15/quintal towards cane price or interest free loan with a moratorium of five years.

"Sir, the financial position of the sugar factories in this current year is very well known to the state government," a letter written by UP Sugar Mills Association (UPSMA) president C B Patodia to chief minister Akhilesh Yadav reads.

He also referred to the proposed relief package of Rs 400-500 crore to the cooperative sugar mills in UP to buttress their case, "who are going through a similar financial stringency."

Meanwhile, the Association thanked the government for announcing the remission of purchase tax of Rs 2/quintal for a year.

He maintained the remission of Rs 2/quintal in purchase tax was at best a token relief and in the current crushing year, the sugar factories will incur a loss of over Rs. 3,500 crore, even after the removal of levy sugar obligation.

The mills reiterated the sugar prices had come down to Rs 3,100/quintal, a drop of about Rs 400/quintal in the last 5 months, while there was no hope of its revival due to large scale imports and huge sugar inventory in the country.

It suggested the position could improve if the Centre took steps to check imports of raw sugar from Brazil and white sugar from Pakistan, by increasing customs duty from 10 per cent to the earlier rate of 60 per cent.

They have demanded relief of at least Rs 25/quintal, so as to enable mills clear arrears to the maximum.

Meanwhile, Kisan Jagriti Manch president Sudhir Panwar urged the government to "bail out sugar industry." He asserted sugar was the only industry in UP, one which directly transferred money to farmers.

"The government should ensure policy measures are translated into the augmentation of farmers' income," he said.

During 2012-1 crushing season in UP, 121 mills produced nearly 7.47 MT of sugar, 7 per cent higher compared to last year's sugar output at 6.97 MT.

Total sugarcane dues touched Rs 22,450 crore this season, of which arrears of over Rs 5,000 crore remain.