Cabinet to review disbursal of soft loans to sugar mills

The Cabinet is likely to review the progress in disbursal of soft loans to sugar millers for clearing cane dues for the 2014-15 season that will end in September. At a meeting on Wednesday, the panel of ministers would also discuss some proposals to meet the deficit rainfall situation, especially in Karnataka and Maharashtra, officials said.

The Cabinet had in June cleared Rs 6,000-crore soft loans to help sugar mills clear part of their Rs 14,000-crore dues to farmers.

However, these loans were provided only to those units that have cleared at least 50 per cent of their outstanding arrears by June 30.

The government has mandated banks to obtain from sugar mills a list of farmers with bank account details and the extent to which cane dues are to be paid. “The idea is to make direct transfer of dues to the bank accounts of farmers on behalf of sugar mills. Subsequent balance, if any, would then be credited into account of the mill concerned, Union minister Nitin Gadkari had then said.

The mills, however, said this won’t address the basic problem of a surplus and depressed sugar prices.

India’s sugar production is estimated to cross 28 million tonnes (mt) in the 2014-15 marketing year (October-September), against 24.3 mt in the previous year. The total annual demand is pegged at 24 mt.