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Govt clears Rs 6,000-crore soft loans for sugar mills – Industry unhappy

This article was posted on Jun 11, 2015 and is filed under Market News

Payment to be made directly to farmers; industry unhappy, says glut woes not addressed

The government will provide soft loans of Rs 6,000 crore to sugar mills to help them clear part of their Rs 21,000-crore dues to farmers. But many in the sugar industry are not liking the fact that this payment is going to be made directly to farmers’ bank accounts, through the Pradhan Mantri Jan Dhan Yojana to the extent possible.

The Cabinet Committee on Economic Affairs (CCEA) on Wednesday decided that the government would not charge any interest on the loan for a year, itself bearing the burden of about Rs 600 crore.

However, there is another catch as well: These loans will be provided only to those units that have cleared at least 50 per cent of their outstanding arrears by June 30.

“Mills have not been able to make payments to farmers because of low domestic prices and high production. Cane arrears have reached Rs 21,000 crore,” Union Road Transport Minister Nitin Gadkari said after the Cabinet meeting.

For more visit: Business Standard

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