Banks disburse Rs 6,420 cr to 443 sugar mills for cane payment

Banks have disbursed Rs 6,420 crore interest free loans to 443 sugar mills for clearing the payment to sugarcane farmers, Parliament was informed today.
In December, the Cabinet Committee on Economic Affairs (CCEA) had approved Rs 6,600 crore interest free loans to the sugar industry exclusively for clearing sugarcane arrears.
"The Scheme for Extending Financial Assistance to Sugar Undertakings (SEFASU) was notified by the government on January 3, 2014 with a view to improving the liquidity position of sugar factories for clearing cane price arrears of previous seasons and timely settlement of cane price of current season," Minister of State for Finance Jayant Sinha said.

Sugar season runs from October to September.
The scheme provided for moratorium period of two years, thereafter the repayment would be made over a period of three years, he said in a written reply in the Lok Sabha.
"As reported by State Bank of India (SBI), which is the nodal bank for SEFASU, a total of 453 mills have been sanctioned loans amounting to Rs 6,616.34 crore, out of which Rs 6,420.09 crore have been disbursed to 443 mills under the said scheme," Sinha said.

According to the data, 130 mills in Maharashtra got loans worth Rs 2,082.21, while 89 mills in Uttar Pradesh received 1,863.73 crore.

Maharashtra and Uttar Pradesh are the top two sugar producing states in India, which is the world's second largest producer after Brazil.
As reported by SBI, the minister said, there were 3 sugar mills in Uttar Pradesh and 1 each in West Bengal, Maharashtra and Karnataka, which had defaulted/outstanding loans during the last three years.