New Delhi: With eye on upcoming assembly elections in Uttar Pradesh, Prime Minister Narendra Modi-led NDA government is likely to review production subsidy to sugar mills for 2015-16 season on Wednesday at its Cabinet meeting. Taking into account lower sugar production and exports, the Cabinet Committee on Economic Affairs (CCEA) may revise production subsidy, which was discontinued in May this year.
To address liquidity stress in sugar industry and facilitate timely payment of cane arrears, the Centre last year had announced a subsidy of Rs 4.50 per quintal of cane crushed during October 2015-September 2016 season with a condition that mills meet the export quota of four million tonnes and ethanol blending target.
The subsidy scheme was discontinued as sugar rates improved plus domestic production was estimated to be lower at 25.1 million tonnes for 2015-16 season as against 28.3 million tonnes in the previous year.
“The CCEA meeting is scheduled for Wednesday. The Food Ministry's proposal 'Review of scheme to provide production subsidy to sugar mills' is on the agenda,” a government source said.