The Rs 2,070 crore financial package will help in reducing the country's total sugar arrears to nearly Rs 11,000 crore plus from the previous Rs 14,000 crore, Tarun Sawhney, Vice Chairman and Managing Director (MD) of Triveni Engineering said.
The Uttar Pradesh government today announced Rs 2,070 crore financial package for cash-starved sugar mills.
In an interview with CNBC-TV18, Sawhney said that despite the financial assistance, there will be arrears, which need to be addressed by the Central government. Prices need to be moved to kickstart exports, he said.
Close to four million tonne of sugar is lying idle, waiting to be shipped to countries with high demand. Sawhney said it is now the Central Government’s duty to look for alternatives to reduce arrears further.
The financial package was promised by the state government 10 months back and finally got the authorities nod today.
Below is the transcript of Tarun Sawhney's interview with Sonia Shenoy and Reema Tendulkar on CNBC-TV18.
Reema: You are a big producer in the state of Uttar Pradesh, Rs 2,070 crore, is it sufficient as a financial package and how much of it will come to you?
A: Rs 2,070 crore-firstly is a welcome move by the state government of Uttar Pradesh. It is something that the Uttar Pradesh government had promised almost 10 months ago when they were setting the cane price for this current season. It equates to about Rs 28.60 per quintal of cane.
If we look at the cane price position, in the state of Uttar Pradesh, of the Rs 280 per quintal that is payable, approximately Rs 150 has already been paid. So, with this Rs 28.60, we will come up to approximately Rs 180 average leaving a further Rs 100 per quintal of cane to be paid.
A portion of that will come through the Central government scheme, about Rs 25 will come through that. There will still be a balance - arrears - even after receiving all of these subsidies. As of today, we are all very happy that the state government has delivered on its promise and it is a welcome move and a very positive step.
Sonia: This is the same old package that was discussed earlier, it is just the approval that has come in today, right?
A: This is the same package which was announced 10 months ago as part of the cane price. So, the state government said that it will offer a maximum of Rs 40 per quintal as a subsidy. Rs 11.40 was effectively taxes and Rs 28.60 was a direct subsidy. It is that Rs 28.60 which totals up to Rs 2070 crore which has been announced now by the UP state government.
Reema: Any word on how this shortfall of Rs 75 per quintal will be made up? Can we expect more assistance from the government, Central or state?
A: The state government has lived up to all the promises that it had set out and of course the associations have written to the state government saying that it is still not enough.
Yet, the state government certainly has delivered on whatever they had set out. It is now the turn of the Central government to really take up this task. There has been a significant amount of debate at the Centre regarding potential exports and regarding a variety of other moves.
There has been talk about a barter trade of sugar with other countries etc. The delegations have gone and examined that. However, there has been no real physical movement of sugar out of our shores. We need to get this sugar out and we need some movement in sugar prices coming up to allow us as the industry to have the capability to pay this price.
It is not just the state of Uttar Pradesh - all the other sugar producing states across the country that have significant arrears and for that the Central government really needs to act quickly and not wait until the start of the next sugar season. Triveni Engg stock price On September 03, 2015, at 11:39 hrs Triveni Engineering and Industries was quoting at Rs 24.25, up Rs 0.45, or 1.89 percent. The 52-week high of the share was Rs 31.25 and the 52-week low was Rs 14.40. The latest book value of the company is Rs 24.39 per share. At current value, the price-to-book value of the company was 0.99.