In relief for private sugar mills, UP extends soft loan window to Oct 31

In a breather for private sugar mills weighed down by outstanding sugarcane arrears of almost Rs 80 billion, the Yogi Adityanath government has given an additional window of two weeks to apply for the state-sponsored soft loan totalling Rs 40 billion. To aid the settlement of cane arrears by private millers, the state government had earlier created a corpus of Rs 40 billion to be offered as a soft loan. The beleaguered mills were supposed to apply for the soft loan by October 15, while commercial banks were mandated to process and clear the loan proposals by October 31. However, owing to cumbersome paperwork and formalities, coupled with the festival season holidays falling in between, the government conceded to the request of the mills and banks to extend the application window. UP cane commissioner Sanjay Bhoosreddy has extended the date for applying for the soft loan by another two weeks to October 31. The banks are required to process the proposals and release the soft loan component by November 10. However, the soft loan would be offered only to those private mills whose payments ratio stands higher than 30 per cent for the previous crushing season. It would be offered for a period of five years upon interest payment of five per cent. The defaulters would have to cough up interest payment at the rate of 12 per cent.

Of the total 119 mills in the state, 63 mills have achieved a ‘good payment’ ratio of 73-80 per cent, 42 have clocked a payment ratio of over 50 per cent, while nine have achieved a payment ratio of less than 50 per cent. UP has 94 private mills. At present, a little over Rs 80 billion, to be paid to farmers, is pending with UP sugar mills. Of this amount, private millers owe almost Rs 79 billion, with the 24 cooperative units accounting for the remaining portion outstanding. Last month, Chief Minister Adityanath had set the deadline of November 30 for private millers to settle their cane outstanding. At that time, the consolidated arrears stood at about Rs 95 billion, of which the 94 private mills accounted for over Rs 86 billion from the 2017-18 crushing season. During the 2017-18 season, UP mills had clocked net dues of over Rs 354 billion. In the recent Supplementary Budget, the state had allocated a total of Rs 55 billion, including the soft loan component of Rs 40 billion, to bailout the sugar sector from the payments crisis, which threatened to impede the coming crushing season 2018-19. The next crushing season is likely to start around the first week of November even as the state’s sugarcane area has risen. The sugar glut has kept prices low over the past several months with Adityanath also conceding that the domestic sugar sector was passi

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