A frustrated UP government on Thursday said all possible favours in the form of waivers in entry tax and purchase tax have been given to the sugar industry and that there was no scope of further negotiations on their remaining demands.
“The government has had prolonged talks with the industry and now there is no possibility of any further talks. We have set a new deadline for starting mills — December 4 for those in western UP and December 7 for the rest. We hope they will start by this deadline. But if they do not do so, we will be forced to take strict action against them as per legal provisions,” principal secretary Rahul Bhatnagar said at a press conference here.
The government said that the industry’s demand that the cane price be brought down to Rs 225/quintal is unjustified and unreasonable. Bhatnagar said that the government has taken great care to balance the situation — make cane price remunerative for the farmers as well as keep it viable for the millers. “But keeping in mind the financial difficulties that the industry has brought in front of us, the government has decided to extend financial help to the industry for the current season, which includes a waiver of Rs 2/quintal in cane purchase tax, which would benefit the industry by Rs 160 crore. A partial decontrol of molasses will benefit the industry by Rs 167 crore at the rate of 2.10/quintal.”
“The interest subvention scheme that will be provided by the Centre will give the industry Rs 190 crore at the rate of Rs 2.40/quintal, an exemption of Rs 2.73 per quintal as entry tax will give the industry an extra Rs 219 crore. And to top it up, the doing away of the levy sugar burden will give the industry an extra Rs 809 crore, which when converted would mean a benefit of Rs 10.15/quintal.”
“In total, the industry will save about Rs 20/quintal on cane, which would effectually take the Rs 280/quintal SAP to Rs 260/quintal. The government is of a firm mind that on account of all these benefits, the sugar mills will retain their viability and therefore the mills should start crushing operations immediately, without any further delay,” he said, adding that if the mills do not start crushing even then, the state government will be forced to take all kinds of legal action against them. Recovery certificates (RCs) would be issued against them after taking into consideration their last year’s cane arrears and the interest portion.
Further, in keeping with the interests of the cane farmers, steps will be taken to run the mills in accordance with the legal options available to us,” he said. Asking the mills to start crushing, Bhatnagar said that the government has decided to assess the price of sugar and its by-products again after three months.
“The government will then re-assess the effect that the prices will have on the financial condition of the sugar companies then and take necessary action,” he said.
Stating that the UPSMA has been demanding the linkage formula for cane, Bhatnagar said the state has formed a committee under the chief secretary, which will decide on a formula that is remunerative for the farmer as well as viable for the industry. “The recommendations of this committee will be kept in mind while fixing next year's cane price,” he said.