UP sugar mills start laying off workers

66 mills have given suspension notices so far. There are 95 private and 23 cooperative sugar mills in Uttar Pradesh

Private sugar mills in Uttar Pradesh have started laying off workers following the notice of suspension of operations in the coming 2014-15 crushing season. All major sugar companies, including Bajaj Hindusthan and the Balrampur groups, have informed their seasonal, temporary and contractual staff about the suspension of operations, meaning their services were not required currently.

The lay-offs have hit the labourers and supervisory-level staff the most, which form the bulk of the mills’ headcount. Permanent staff, including managerial and those coming under the wage board, have been spared for the time being.

Labourers include unskilled, semi-skilled and skilled workers. Even during off-season, the seasonal staff are paid about 50 per cent of their salary as retention compensation.

The mills had decided not to start crushing, unless the state government yielded to their long-pending demands of linking cane and sugar prices and paying Rs 9 a quintal as promised last year for clearing arrears.

Sixtysix mills have given suspension notices so far. There are 95 private and 23 cooperative sugar mills in Uttar Pradesh. All the mills collectively employ about 150,000 workers during the crushing season.

The Indian Sugar Mills Association (Isma) sought to downplay the development. “It is a normal thing for the mills to withdraw staff when the operations have been suspended,” Isma director-general Abinash Verma told Business Standard. “If the economic loss is greater in running a mill than remaining idle, the mills would not run,” he added.

The private mills are saddled with massive cane arrears of about Rs 5,000 crore and the Allahabad High Court is hearing a case in the matter. The mills contend high cane price was the major contributor to arrears year after year and to the current crisis.

“Nearly 10,000 highly-skilled employees in UP have been sitting idle, adding to the woes of the already-ailing sugar industry,” said A K Shukla, former secretary-general of Sugar Technologists’ Association of India. According to him, managerial and technical staff, both permanent and contractual, have been advised to go on leave.

“At a time when the state government should have come forward to support the sugar industry, cases have been lodged against the mill owners,” Shukla noted.

He said mills had no choice other than shutting down units and sending workforce on forced leave.

Uttar Pradesh’s sugar-sector economy is pegged at Rs 30,000 crore annually and it contributes handsomely to the exchequer by way of taxes.