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The Food Ministry is in the process of finalising a bailout package worth Rs 3,000-3,500 crore for the sugar industry as a whole.
While two to three alternatives were discussed by the cabinet on Wednesday, the Food Ministry along with its agriculture counterpart have decided for the fastest option of providing bailout in the form of interest-free loans.
While the amount of the loan for the millers will be linked to the amount of excise duty paid in 2012-13 and 2013-14 sugar seasons taken together, they will have to pay back the principal amount in 24 instalments. The package is for millers across and not just Uttar Pradesh.
The details will be finalised by the ministry and sent to the cabinet next week for approval. While banks will offer the loans at 12 per cent, this interest portion in entirety will be borne by the government.
According to officials, the other alternatives of increasing the duty drawback on sugar and reducing the time limit for re-export of imported sugar will have to be taken up by the ministry of commerce.
“Sugar is not the only industry facing trouble. Therefore such options will have to be considered along with other many industries who are in the same boat,” said officials. Accordingly, the sugar industry has been advised to take up the issue with the ministry of commerce for deliberation.
Earlier, the Food Ministry had suggested for waiving off prior registration norms for export of sugar from India following surplus availability in the domestic market. However the relaxation of these norms was sought for export of around 2-2.5 million tonne of sugar out of the existing stock for the sugar season starting October 2013- September 2014. Officials explained the relaxation has been done by increasing the cap for export per registration.
As per the latest and final estimates available with the ministry, the sugar productivity is expected a tad less than last year at 235-245 lakh tonnes for the new sugar season Oct-Sept, 2013-2014.
According to officials, the area under cultivation has shrunk a bit to 4.92 million hectares as against 5.03 million hectares last season.
