Sugar industry may get a sweet bailout this week from CCEA

NEW DELHI: The government will be taking up the issue of bailing out the sugar industry at the Cabinet Committee of Economic Affairs ( CCEA) this week.

A 12 per cent interest subsidy on Rs7,200-crore loan to sugar mills to pay strictly to cane farmers and restructuring of loans under RBI guidelines are some of the recommendations in the proposed relief package for the industry.

Agriculture minister Sharad Pawar said, “This proposal will go in two phases -- one this week and the final next week.” Not divulging details, he said the restructuring of loans subject to RBI clearance could be taken up this week. The committee is meeting tomorrow. According to Pawar, there were a number of suggestions received after discussions with the Indian Sugar Mills Association, National Federation of Cooperative Sugar Factories, major sugar producing states like Uttar Pradesh, Maharashtra and Karnataka.

“We have finalised our own recommendations. But as this is an informal group of ministers, the matter will go to CCEA. We will be able to provide details in a week,” he said adding that one proposal might go to CCEA this time and the entire package will be discussed in the next CCEA meeting.

Prime minister Manmohan Singh appointed an informal group of ministers in November this year to look into the issues of cane farmers and sugar industry. Finance minister P Chidambaram, civil aviation minister Ajit Singh, petroleum minister Veerappa Moily and food minister KV Thomas are the members of this panel.

Earlier in the day, after the meeting of the group, food minister KV Thomas said, “The proposal on giving a financial package to the sugar industry will come before the Cabinet at the earliest.” He added that there were discussions on giving other incentives, which included reducing the period for re-export of imported sugar from the existing 18 months.

Other key measures which have been proposed by the PMappointed committee of ministers are incentives to produce 4 million tonne of raw sugar and setting up of buffer stock, besides doubling of ethanolblending in petrol to 10 per cent from the current 5 per cent. “We will provide incentives to produce raw sugar on the basis of WTO recommendation for marketing and promotion,” said Pawar on Wednesday. India produced 80,000 tonne of raw sugar in the last sugar season.