The government has allowed the sugar mills to take the subsidy benefit even if they exported 50 per cent of their quota instead of earlier norm of 80 per cent.

The cabinet committee on economic affairs (CCEA) decided on Wednesday to extend the benefit to mills after many states requested the Centre to reduce the target of sugar export and ethanol supply due to non-availability of sufficient sugarcane and molasses, an official statement said.

The government in November had announced a subsidy of Rs 1,147 crore to sugar mills by agreeing to pay the amount to sugarcane farmers on behalf of companies so that they are able to export 3.2 million tonnes of the sweetener.

The production-linked subsidy of Rs 4.50 per quintal was paid directly to cane farmers during 2015-16 season (October-September) on behalf of the mills on the condition that they will export at least 80 per cent of their export quota. The Centre has allotted mill-wise export quota that totals 4million tonnes. India has exported about 1.6mt of sugar so far this season, according to industry data.