The government today approved a production subsidy of Rs 5.5 per quintal for sugarcane farmers to help cash-starved millers clear cane arrears that have surged to about Rs 20,000 crore due to sharp fall in sugar prices on record production.
The Cabinet Committee of Economic Affairs has approved a production-linked subsidy of Rs 55 per tonne (Rs 5.5 per quintal) for cane farmers, sources said.
The move also comes at a time when Karnataka, a leading sugarcane producing state, is going for polls on May 12.
Welcoming the decision, industry body ISMA's Director General Abinash Verma said the industry is facing huge losses due to fall in ex-mill sugar prices.
He said the subsidy amount could be Rs 1,500-1,600 crore on the basis of sugarcane crushed by the
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