Relief to sugar mills, guidelines issued for restructuring of debt taken from Sugar Development Fund

Financially weak but financially profitable sugar mills are being given the facility of restructuring of debt,

relief to sugar mills

The Center has issued guidelines for the restructuring of loans taken by sugar mills from the Sugar Development Fund (SDF). In this, the mills who have failed to repay the loan have been given a moratorium for two years and after that this loan will have to be repaid in the next five years.

Outstanding outstanding of more than Rs 3 thousand crore

According to a government statement issued on Wednesday, the total outstanding in the case of loans taken from SDF is around Rs 3,100 crore. It also includes principal and interest. On January 3, the Department of Food and Public Distribution issued guidelines “for restructuring of SDF loans under Rule 26 of the SDF Rules 1983”. The guidelines for restructuring have been issued to “facilitate the restructuring of financially weak but economically profitable sugar mills which have availed loans under the Sugar Development Fund Act, 1982”. Said that in the guidelines, there is a provision for a “momentum of two years and then to repay the loan in five years”. The department said that this is expected to provide a big relief to the financially weak sugar mills who have taken loan from SDF.

Demand for monitoring team to solve the problem of ethanol manufacturers

At the same time, the Karnataka government has asked the Center to constitute a monitoring team to address the problems being faced by ethanol manufacturers in implementing the Ethanol Blended Petrol (EBP) programme. In a meeting with Union Food Minister Piyush Goyal here, Karnataka’s Sugar and Cane Development Minister Shankar B Patil Munenenkoppa shared in detail the problems being faced by ethanol manufacturers and discussed the issues faced by the Union Food Ministry, State Cane Commissioners, Oil Marketing Companies and NABARD. Requested to set up a monitoring team of officials. The Karnataka minister also said that there is a need for a long-term pricing formula to encourage capacity addition of ethanol. This will help in reducing the uncertainty of return on investment for ethanol production. Karnataka is the third largest sugar producing state in the country

Efforts continue to take the sugar sector out of pressure

The sugar sector is engulfed in many types of economic pressures, due to below cost, many mills are not able to repay the money of the farmers, due to which the arrears on them are increasing. To deal with this, on the one hand, the government is providing cheap loans to the sector, while on the other hand, emphasis is being increased on other products like ethanol, so that the mills get additional means of income.

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