 "Sugarcane arrears: UP to crack whip on private sugar mills")
With massive sugarcane arrears of over Rs 8,000 crore and Allahabad High Court getting tough over delay in farmers' payment, Uttar Pradesh government is now gearing up to take 'strict' action against the defaulting private sugar mills.
The mills, which slog at the bottom of the payments chart, would be the first to face the heat from the government.
While the private mills' consolidated payment stand at a little above 60 percent, some units' payments are below 10 percent. For example, Modi Group has paid about Rs 26/quintal only against the state cane price of Rs 280/quintal.
Others in this league include Mawana (payment of Rs 74/quintal), Rana (Rs 71/quintal), Simbhaoli (Rs 92/quintal), Yadu (RS 116/quintal), Uttam (RS 133/quintal) etc.
In a meeting with private sugar mill owners here today, UP sugar industry and cane development principal secretary Rahul Bhatnagar minced no words in saying that the government was now prepared to act 'real' tough with the defaulters, following the HC stance and pressure from farmers.
Balrampur Chini managing director Vivek Saraogi was amongst those who attended the meeting.
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Only 63 percent of the state sugarcane payment for the 2014-15 crushing season has so far been settled by mills with the private millers faring even worse at under 61 percent.
Of the consolidated payment commitments of over Rs 20,644 crore for the season, the 118 UP mills have paid Rs 12,951 crore, which leaves arrears of Rs 7,693 crore. With additional interest payment of Rs 405 crore, the net arrears bulge to Rs 8,098 crore.
Hearing a case over arrears, the HC had on July 29 directed cooperative mills to clear all dues in two weeks. The 23 mills in cooperative sector have dues of Rs 476 crore.
Besides, the HC, while posting the case to August 27 for next hearing, also directed the private mills for ensuring maximum payment of arrears. The 94 private mills in UP have consolidated arrears of Rs 7,656 crore.
UP Cooperative Sugar Factories Federation Limited managing director B K Yadav told Business Standard efforts were being made to comply with the HC order. "We are exploring all avenues for settling our dues, including seeking funds from the central government," he informed.
Meanwhile, the private sugar mills have sought incentive of Rs 28/quintal from the state government, which would provide almost Rs 1,900 crore in the hands of the private millers.
"At the start of crushing season, the government had promised to provide this incentive if sugar prices fell below Rs 31 per kg. Since, the retail prices have crashed much below this mark, the government should fulfill its promises," a sugar industry official said.
The UP sugar commissioner could not be reached for comments despite repeated attempts at the time of filing of the report.