The Cabinet Committee on Economic Affairs (CCEA) approved 6600 crore rupees interest-free loans to cash starved sugar industry on 19 December 2013. The loans will be provided by banks to sugar mills exclusively for making payments to sugarcane farmers, including arrears. The loans are equivalent to the excise duty paid by the mills in the past three years.
The Interest subvention will be 12 percent which will be borne by the Centre and Sugar Development Fund. Mills have to repay the loans in five years and can avail of a moratorium on repayment for the first two years. The loans will help the industry reduce around 500 crore rupees annually of interest burden in the next 5 years.
The informal Group of Ministers (GoM) set up by the Prime Minister under the chairmanship of Union Agriculture Minister Sharad Pawar recommended the proposal to address the cash crunch of the sugar industry.
The sugar industry is facing financial problems due to higher cost of production and lower sugar prices in the wake of surplus production in the last few years.
The Cabinet Committee on Economic Affairs is one of the standing committees constituted by the Government of India.
Some of the major functions of CCEA
• CCEA review the economic trends on continuous basis.
• CCEA directs and coordinates all polices and activities in the economic field including foreign investment, which require policy decisions at higher level.
• Matters regarding fixation prices of agriculture and reviewing the prices of rural development including the small and marginal farmers are in CCEA’s competence.
• Prices of industrial raw materials and products, industrial licensing polices including establishment of joint sector undertakings, reviewing of public sector undertakings (structural and financial) under purview of CCEA.
• CCEA facilitates finalization of factual reports on the accomplishments of ministers, Agencies and public sector undertaking involved in implementation prioritized schemes or projects evolved by the Prime Minister.
If you have any Question/Point on the above information, please ask/discuss it in the Current Affairs Group
Where: New Delhi
When: 19 December 2013