Extra Rs 300-cr drought package for farmers approved

The Cabinet also eases norms for Rs 6,000-cr soft loan for sugar sector

With a deficit in monsoon rain, the Cabinet Committee on Economic Affairs (CCEA) approved an aid package to help farmers, which included Rs 100 crore for a 50 per cent subsidy on diesel for irrigation.

It also raised the ceiling on seed subsidy, to partially recompense the farmer for extra spending in re-sowing and purchase. And, an extra Rs 150 crore for horticultural crops and Rs 50 crore under an additional fodder development programme. “These measures have been sanctioned with an additional allocation of Rs 300 crore this financial year, while the actual expenditure might vary, depending on drought,” a senior official said.

He said these interventions would help states initiate remedial measures without delay to save standing crops and perennial orchards in rain-deficit areas.

Sugar

The cabinet also eased the norms for sugar mills to take soft loans, amounting to around Rs 6,000 crore, to help clear sugarcane arrears to growers. Officials said mills that had cleared half their cane dues by June 30 were eligible; this date has been relaxed until August 31. The government has provided a year's payment moratorium on this loan and will bear the interest subvention cost to the extent of Rs 600 crore for the period.

“This will benefit about 150 additional sugar mills which had pro-actively liquidated more than 90 per cent of their cane dues,” an official said.