New Delhi: The government will soon announce a bailout package of Rs 8,000 crore to sugar industry to ensure the cash-starved mills clear cane dues of Rs 22,000 crore, Food Minister Ram Vilas Paswan said today.
A bailout package has been worked out days after the BJP lost Lok Sabha by-poll in Kairana constituency in Uttar Pradesh, the country’s largest sugarcane producing state.
“A proposal of Rs 8,000 crore has been sent to the Cabinet. Cabinet will take a decision,” Paswan told reporters while highlighting his ministry’s achievements in the last four years.
The minister added that a decision in this regard may be taken very soon. He, however, did not give details.
Paswan also refuted suggestions that the package is linked to results faced by the ruling party in recent by-elections, especially in Uttar Pradesh.
As per sources, the Union Cabinet is scheduled to meet tomorrow.
A bailout package has been worked out as sugar mills’ financial health has worsened due to sharp fall in prices following a record sugar production of over 31.6 million tonnes so far in the 2017-18 marketing year (October-September).
The proposed Rs 8,000-crore package include creation of sugar buffer stock of 3 million tonnes, interest subsidy on Rs 4,500 crore loan to mills for expansion and creation of new ethanol capacity among others.
Last month, the government had announced a Rs 1,500 crore production-linked subsidy for sugarcane farmers to help millers pay cane payments.
Presently, the average ex-mill price of sugar is in the range of Rs 25.60-26.22 per kg, which is below the cost of production.
The Centre has already doubled sugar import duty to 100 per cent and scrapped export duty to check sliding domestic prices. It has also asked mills to export 2 million tonnes of sugar.