With barely a month to go before the 2020-21 sugarcane crushing season begins, the state government is yet to clear the proposal of 30-odd cooperative sugar mills to stand guarantee to raise new loans from banks. This is despite the fact that the cabinet sub-committee, headed by Deputy Chief Minister Ajit Pawar, cleared the proposal a few weeks earlier.
The upcoming crushing season for Maharashtra is expected to see mills crush around 825 lakh tonnes (lt) of cane and produce 93.22 lt of sugar. To ensure timely harvest and crushing of cane, the sugar industry has stipulated that maximum number of sugar mills should start operations. In the case of cooperative sugar mills, weak financial health has proved to impede raising finances necessary for beginning their operations. Around 38 mills, who have ample cane in their area of operations, have submitted proposals seeking government guarantee worth Rs 1,000 crore to raise finances from banks.
A special committee was formed by the state government to look into the demands of mills and to evaluate their eligibility in availing the guarantees. Back in May, the state government had issued a government resolution (GR) that laid down the yardsticks for the same. The technical committee, in its report, had not found any of the 38 mills eligible for the guarantees, but had recommended the names of four mills in Ahmednagar, Sangli and Satara, as these areas had reported a substantial increase in their cane area.
Following this, a special sub-committee was formed, headed by Pawar, to look into the claims of the mills. The committee had given the go-ahead for extending loans to 30 mills. Weeks after this, the file, senior officials say, is yet to come before the state cabinet for its approval. In its absence, the mills are unable to raise pre-seasonal loans for the upcoming season.
The matter, officials said, has caused conflict, as all three parties in the Maha Vikas Aghadi government have pressed for mills managed by their leaders to be included in the list. The majority of mills are managed by leaders whose alliance was with the NCP or Congress, while some mills are, at present, with leaders who are now with the BJP or Shiv Sena. Some millers were traditional with the NCP or Congress, but had jumped to BJP or Shiv Sena before the state election to be in the good books of the government.
Even in the alliance, the matter has generated some friction, as some senior bureaucrats have expressed strong reservations about extending government guarantees to cooperative sugar mills. On their part, mills have pointed out how, In case they are unable to raise finances, the state government would have to pay for the unharvested cane, which can easily cross Rs 8,000 crore. The delay, they said, will affect their functioning and can affect the upcoming season.