With cane arrears to farmers mounting, an informal ministerial panel on Monday explored options such as production-linked subsidy, imposition of sugar cess and reducing GST on ethanol to help sugar mills in clearing dues worth Rs 19,000 crore to sugarcane farmers.

Road transport and highways minister Nitin Gadkari, food minister Ram Vilas Paswan and petroleum minister Dharmendra Pradhan on Monday held a meeting to discuss ways to deal with huge cane arrears to growers. Senior officials of PMO and ministries of agriculture, commerce, food, petroleum and finance also attended the meeting.

“Sugarcane arrears have touched about Rs 19,000 crore. We discussed this issue. There were several suggestions like production linked subsidy, sugar cess and reduction of GST on ethanol from 18 per cent to 5 per cent,” Paswan told reporters after the meeting.

He said, the government has not decided anything now and there could be one more meeting before finalising cabinet proposal on this issue. Paswan said, there was also a suggestion that certain percentage of ethanol blending should be made mandatory to boost ethanol production.

The minister said the government has already doubled sugar import duty to 100 per cent and scrapped export duty to check sliding domestic prices. It has also asked mills to export 2 million tonnes sugar.