UP slaps recovery notices on Bajaj Hindusthan, Modi Group sugar mills

At present, Rs 7,500 crore cane dues are outstanding as many as 94 on UP private millers

Sugar mills
UP is the country’s top sugar and sugarcane producer, and had logged 12.65 million tonnes (MT) in sugar output in the last 2019-20 crushing season

Taking a tough stance on the non-payment of sugarcane dues, the Uttar Pradesh government has issued recovery certificates (RCs) against sugar mills operated by big Groups viz. Bajaj Hindusthan, Modi, Simbhaoli etc.

The RCs have been issued under Sections 17 (4) and 18 (3) of UP Sugarcane (Supply and Purchase Regulation) Act, 1953. The action was taken after these mills failed to settle their payment commitments despite repeated warnings by the government.

The RC empowers the district administration, if need be, to seize movable and immovable properties, including sugar stock, for auction to settle the liabilities. The four defaulter mills are Sujanpur-Badaun (Yadu Group), Chilwariya-Bahraich (Simbhaoli Group), ModiNagar-Ghaziabad (Modi Group), and Rudhauli-Basti (Bajaj Hindusthan Group).

The UP private sector mills, numbering 94, collectively owe farmers’ outstanding of nearly Rs 7,500 crore for the previous 2019-20 crushing season. UP sugarcane and sugar commissioner Sanjay Bhoosreddy said stricter action would be taken if they still failed to make payments.

He claimed about 80 per cent of the payment for the 2019-20 season had been made, and for the residue, the follow up action was being intensified. “If we exclude top defaulter mills, the payment percentage would improve to 90 per cent,” he told Business Standard adding some mills had even settled 100 per cent of their dues.

Meanwhile, of total dues of Rs 7,500 crore, the state mills are due to get Rs 3,000 crore under different central schemes, including buffer subsidy, production subsidy, transport subsidy and maximum admissible export quantity (MAEQ).

Besides, about Rs 1,000 crore will be sent directly to the farmers’ accounts through the escrow account after receiving payments from the state energy department for the supply of cogenerated electricity.

Bhoosredday said under the current regime (Apr 2017-present), a record cane payment of over Rs 1.07 trillion had been made to farmers, including Rs 35,423 crore in 2017-2018, Rs 33,048 crore in 2018-19 and Rs 27,928 crore in crushing season 2019-2020, as well as Rs 10,659 crore cane payment pertaining to the previous crushing seasons

UP is the country’s top sugar and sugarcane producer, and had logged 12.65 million tonnes (MT) in sugar output in the last 2019-20 crushing season, which was more than 45 per cent of India’s sugar production of 27.2 MT.

The state’s annual sugarcane economy is pegged at nearly Rs 50,000 crore. According to preliminary estimates, UP has a bumper cane crop in 2020-21 season spanning 2.29 million hectares (MH).

According to a preliminary report of the Indian Sugar Mills Association (ISMA), the domestic sugar production was estimated at 30.5 MT in 2020-21, which would be 12 per cent higher than 27.2 MT in 2019-20. UP is estimated to have sugar output of 12.3 MT in the coming 2020-21 season, which is due to start soon.