Mumbai: State plans Rs 100 per quintal subsidy to transport excess sugar to other states

The Maharashtra government has proposed to provide a relief package to the sugar industry, which has been struggling to clear the rise in stock. The government plans to provide a subsidy of Rs 100 per quintal for sugar factories to be able to transport the stock to Tamil Nadu, Jammu and Kashmir, North East and West Bengal, where there is a shortage of sugar, via train. The government’s outgo towards this will be Rs 150 crore.

This was discussed at the meeting chaired by Deputy Chief Minister Ajit Pawar and attended by ministers Balasaheb Thorat, Balasaheb Patil and Amit Deshmukh as well as representatives of the sugar industry and department officers. Sugar industry players made a strong plea for the government’s intervention, as their financial situation will further worsen if the stock remains unsold.

The demand comes at a time when Maharashtra has already crossed the sugar production of 10 million tonnes mark and it will end with a total production of 10.5 million tonnes for 2020-21 against 6.2 million tonnes in 2019-20. Of the 189 sugar factories, 101 have been closed and 88 are still engaged in sugarcane crushing. “However, there is yet another problem, as it will have a carry forward (unsold) stock of 5.4 million tonnes. The sugar industry wants at least 1.8 million tonnes of sugar to be disposed off so that the unsold stock falls to 3.6 million tonnes. The government will soon take a decision on providing subsidies for sugar transportation by train,” a minister who was present at the meeting told the Free Press Journal.

Further, the sugar industry urged the state government to pick up 20% equity share and provide interest subsidy up to 3% for the expansion and establishment of new ethanol units. “The industry representatives pleaded that sugar units have no funds to invest. Banks are also refusing to provide loans, citing it will cross their exposure limit to the sugar sector. However, the industry pointed out that, with the expansion of existing units and setting of new units, the state can clock an ethanol turnover of Rs 18,000 crore annually. The total GST collection will be Rs 900 crore, of which the state can get Rs 450 crore,” said another minister. He added that the government will take a call after seeking the views of the Finance Department.

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