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CCEA nod for guidelines to provide aid to sugar industry for payment of cane price arrears

Dec 26, 2013 15:15 IST

The Cabinet Committee on Economic Affairs (CCEA) on 26 December 2013 approved the guidelines for providing financial assistance to the sugar industry for payment of cane price arrears. The expenditure for the scheme will be met fully from the Sugar Development Fund (SDF).

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The Central Government will provide an interest subvention up to 12 percent at a simple rate of interest for the additional working capital loans to the sugar undertakings. Banks will provide the additional working capital loan that is equal to last three sugar seasons excise duty, cess and surcharge on sugar.

Sugar undertakings with loan classified Non Performing Assests (NPA) by the banks are also eligible for the loans only if the concerned state government will give a guarantee for their new loans.

The interest subvention on the total loan has been provided for five year, which includes moratorium period of two years. In the principal repayments, no interest subvention will be provided for the period of defaults. The loans would be meant exclusively for effecting cane price payments by the sugar mills.

 

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