Cabinet okays interest-free loan for sugar sector - Times of India

NEW DELHI: In a big relief to the sugar industry, the Cabinet on Thursday approved providing interest-free loan worth at least Rs 6,600 crore to mills for making payment to farmers. Sources said the minimum relief will be Rs 6,600 crore but it could go up to Rs 7,200 crore.

Mills have arrears of Rs 3,400 crore. In Uttar Pradesh, it's around Rs 2,400 crore.

Welcoming the move, Indian Sugar Mills Association director general Abinash Verma said, "The loans will have to be used to pay cane price of farmers, will ensure timely payment to the farmers to that extent at least, including the clearance of past cane arrears of Rs 3000 cr ore. It will help the industry reduce around Rs 500 crore annually of interest burden in the next five years. The industry eagerly waits for the government's help to reduce some of the surplus sugar stock as well as take immediate steps to rationalize cane pricing policy. Those can further help the sugar sector come out of the current financial crisis."

An informal group of ministers (GoM) headed by agriculture minister Sharad Pawar had come out with this proposal considering that non-payment of cane arrears would increase farmers' woes and impact UPA's poll prospects next year.

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