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Amid continuing crisis in the UP sugar industry, the Centre today said it is working on a financial package for the cash-starved mills and asked states to implement the Rangarajan panel's recommendation of linking cane rates with sugar price.
The Centre in May partially decontrolled the Rs 80,000- crore sugar sector by giving freedom to mills to sell sugar and removing obligations to supply subsidised sugar to ration shops.
"We have done our bit. There is no levy. There is no release mechanism. Out of the eight recommendations made by the Rangarajan committee, the remaining are with the state governments, like sharing of profits and others," Food Minister K V Thomas told reporters.
The Rangarajan panel had suggested linking of sugarcane rates to sugar prices which state governments are yet to implement.
"We have written to state governments to implement the Rangarajan Committee recommendations in letter and spirit. There should be sharing of profits," he said, adding that the Centre is now left with no powers.
Sugar companies in Uttar Pradesh, the country's second largest producer, have decided not to run their factories as sugarcane price fixed by the state are not viable.
UP millers have said that they cannot pay more than Rs 225 per quintal to sugarcane farmers as against the state advised price (SAP) of Rs 280 a quintal announced by the UP government yesterday.
"There should be some financial assistance in the form of financial package which we are working on," Thomas said, when asked about the industry's demand to bail out mills.
He said the Centre is aware of the problems faced by the sugar mills.
"There was a meeting yesterday with the Agriculture Minister and the Finance Minister, they are aware of this," he said.
The Centre had discussed various measures, including interest free loans, to provide some relief to the industry.
"The issue is that prices (of sugar) have dropped and that's why the industry is facing serious problems and that's why we are discussing. Three-four alternatives were discussed," Agriculture Minister Sharad Pawar had said after a meeting of informal group of ministers here.
"We have to study what would be the impact of these alternatives. This information we will get in next 8-10 days and again we will sit and finalise," Pawar had said.
Finance Minister P Chidambaram, Civil Aviation Minister Ajit Singh and Secretaries from Food and Commerce Ministries were also present in the meeting.
