UP sugar mill owners meet Yogi over deadline to clear cane arrears

One month's time to settle Rs 4,000 cr dues expires Apr 23; mills mum on what was discussed at meet

In the backdrop of a month’s notice given to private sugar mills in Uttar Pradesh to clear cane dues expiring on April 23, the promoters and senior executives of top sugar companies operating in the state today called upon chief minister Yogi Adityanath here.

This was the first meeting between the CM and representatives of the sugar industry in UP, which is the country’s top sugarcane and sugar producer.

On March 23, Yogi had asked mills to settle arrears within a month. While reviewing the payments situation even as he also warned of strict action against the defaulting units. Currently, the arrears stand at about Rs 4,000 crore.

In today’s meeting, representatives of Balrampur Chini (Managing Director Vivek Saraogi), Dhampur Sugar, K M Sugar (Chairman L K Jhunjhunwala), DCM Sriram (Madhav Sriram), and DSCL apart from UP Sugar Mill Association (UPSMA) president C B Patodia and secretary Deepak Guptara.

“It was a courtesy call by the UP sugar industry to the chief minister of the state and it should not be seen in the context of the April 23 deadline set by the government for the settlement of arrears,” a sugar industry official told Business Standard on condition of anonymity.

“We are hopeful the industry would witness things turning around to the benefit of all stakeholders. There is also possibility of fresh investment coming to the sector if conducive policies are farmed to attract investment.”

In the current season underway, 116 sugar mills have participated in crushing operations, which are likely to continue till the last week of April. So far, about half these mills have already concluded their operations and have subsequently shut for the season.

The private sector accounts for 91 functional sugar units in UP, followed by the cooperative sector (24) and UP State Sugar Corporation Limited (UPSSCL) with a single running unit.

UP sugar economy

The sugar sector in Uttar Pradesh impacts over four million farm households and supports an economy worth almost Rs 35,000 crore a year.

Soon after taking oath of office, Yogi had stressed commitment to doubling farm incomes and promised facilitating the opening of new sugar mills.

Sugarcane always figures as a major political topic during polls, especially in the western UP belts. The sector has been a political hot potato due to pending arrears, court cases, farmers' protests, demand of higher cane price, anomalies in sale of government mills, closure of mills etc.

Inquiry in sale of mills

Earlier, the Yogi dispensation had instituted an inquiry into the alleged loss to the tune of Rs 1,200-crore in the sale of 21 sugar mills during former UP CM Mayawati's regime (2007-12), on account of discrepancies in valuation of land and machinery.

In fact, the successive Akhilesh Yadav government (2012-17) had ordered a probe by the state Lokayukta in November 2012. However, no action was taken.

In 2007, the Mayawati government had decided to privatise 10 operational mills of UPSSCL and 11 defunct units of UP Rajya Chini Evam Ganna Vikas Nigam Ltd (UPRCEGVNL). The 21 mills were sold between July 2010 and March 2011.

A Comptroller and Auditor General (CAG) report had hinted at anomalies in the sale process, related to undervaluation of land and plant machinery and lack of competition. The prices received were far lower than expected in 14 of the 21 mills sold during the process.