Pune: Sugar mills in Uttar Pradesh would have to pay more than .₹ 200 crore in interest arrears after the state government directed them to pay the penalty on unpaid money owed to cane farmers. Data up to May 23 showed that of the .₹ 25,386 crore cane payments, the arrears of UP sugar mills were Rs. 3,638 crore. According the UP cane commissioner’s office, the total interest payment on the outstanding dues will be about Rs. 230 crore.

“UP farmers are now receiving the interest on the arrears. So far, the sugar mills have paid interest of Rs. 1.75 crore. As bills are still being sent, the figure will rise. We expect that all the arrears will be paid within a month,” said Vipin Kumar Dwivedi, commissioner, Cane Development and Sugar, UP. The Bajaj group of companies have the highest dues, said Dwivedi.

While the sources representing the state’s sugar industry expressed doubts about the interest amount, the industry is also worried that this decision will not help the cause because only financially stressed mills end up having cane price payment arrears.