GoM plans financial package for sugar

NEW DELHI: After virtually rejecting the demand of sugar mills for excise duty exemption, the government is now planning a financial package including structured credit for the industry. These and other matters are likely to come up at a meeting of Group of Ministers on Wednesday.

"There is no proposal for exemption of excise duty for the sugar mills and this demand of sugar mills has also not found favour in various quarters including the finance ministry," an official source said.

The GoM, among other things, will also deliberate the issue of raising ethanol level in petrol from the 5% to 10% after weighing the pros and cons. This move will enthuse sugar cane growers who are likely to be saddled with a production of 322.94 million tonne during this season, a 15% rise from previous season.

This would come in the backdrop of a high sugar production of 280 lakh tonne, raising doubts about the sugar mills ability to clear the arrears of farmers.

The arrears of Uttar Pradesh's sugar mills towards its farmers is running in several crore of rupees.
The GoM, headed by Pranab Mukherjee, is likely to work out a financial package that could include easy term loans and other relaxations to sugar mills. The matter would then come up before the Cabinet, the source said.