Sugarcane arrears of Rs 7,500 crore: UP puts mills on week's notice

Uttar Pradesh government has put sugar mills on a week's notice over massive cane arrears of over Rs 7,500 crore for 2013-14 crushing season.

The 95 private mills account for the bulk of Rs 6,883 crore arrears, followed by cooperative mills at Rs 646 crore.

This comes close on heels of the government allocating Rs 400 crore for clearing the dues on cooperative mills, apart from Rs 252 crore for the payment of societies' commission in the UP Budget 2014-15 tabled in assembly on June 20.

Reviewing the payment situation, UP cane commissioner Subhash Chandra Sharma on June 21 gave a week's time to mills to settle dues or else face music. The next review is slated for June 28. The Akhilesh Yadav government has been weathering attack from multiple quarters on the issue.

 

Of the 119 mills, including 95 private, 23 cooperative and one UP State Sugar Corporation Limited (UPSSCL) units that participated in crushing during 2013-14, the sole UP State Sugar Corporation Limited (UPSSCL) unit and a cooperative unit had met 100% payment commitments.

Of total dues of Rs 19,387 crore on 119 mills, more than Rs 7,500 crore still count as arrears, meaning that mills had settled only about 60% of dues.

On May 30, Allahabad High Court hearing a petition filed by Rashtriya Kisan Mazdoor Sangathan had rapped the government and observed the cane commissioner would be held responsible if arrears were not settled by next hearing in July. The commissioner had been directed to file a status report then.

So far, the government had registered 57 First Information Reports (FIR) against 47 mills and issued recovery certificates (RCs) against 17 units.

Last year, the UP government had retained sugar advised price (SAP) of cane at Rs 280/quintal. The mills had been allowed to pay Rs 260/quintal upfront and the remaining Rs 20/quintal later.

During 2013-14, UP sugar output has dropped by 12% to about 6.47 million tonnes (MT). During 2011-12 and 2012-13, UP sugar production had stood at 6.97 MT and 7.40 MT respectively.