Two days after hiking railway fares and freight rates, the government on Monday raised the import duty on sugar to 40 per cent from 15 per cent that caused the cost of the commodity to rise by Rs 60 per quintal on the country’s leading wholesale markets.
In addition, sugar-mill owners will be given an additional Rs 4,400 crore interest-free loan towards payment of pending dues to sugarcane farmers. The total dues amount to around Rs 11,000 crore, said Union minister for food and civil supplies Ram Vilas Paswan on Monday.
“The country’s existing sugar stock will hold good for a year. There is no dearth. So rather than impacting prices, these moves will boost production and also bring in money to sugarcane farmers,” said Paswan who had convened a high-level meeting attended by, among others, transport minister Nitin Gadkari, petroleum minister Dharmendra Pradhan, commerce minister Nirmala Sitharaman, principal secretary to the PM, Nripendra Misra, and cabinet secretary Ajit Seth.
It was also decided that the export subsidy will be extended till September this year to give relief to the sugar industry, which owes Rs 11,000 crore to cane growers largely in Uttar Pradesh.
Paswan said efforts would be made to implement mandatory 5 per cent ethanol blending with petrol and subsequently achieve 10 per cent blending. “The petroleum minister has agreed to this,” he said.
“We have taken four key decisions. We have decided to extend the interest-free loan given against excise duty paid by sugar mills for five years instead of three years,” he said after the meeting.
In December, the Centre had approved Rs 6,600 crore interest-free loans for the sugar industry for clearing cane arrears. It decided to give loans via banks equivalent to the excise duty paid by the mills in the past three years.
“We don’t have any problems to announce these incentives formally if millers are ready to make payments. If they give assurance today, we will announce incentives today itself”, Paswan said.
Some of the decisions will be notified by concerned ministries, while some require the Cabinet nod, he added. “Whenever necessary, we will get these moves to the Cabinet,” Paswan told The Indian Express.
Expressing concern over mounting cane arrears, Paswan said, “While the Centre fixes the cane price, some states are fixing higher prices that are putting burden on millers. There should be a holistic view on pricing.”