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| The Centre will compensate them for the interest payable on these funds in excess of 4 per cent. |
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| This brings the total Central government assistance offer to the states for being passed on to the mills, including private, cooperative and public sector mills, to Rs 2,563 crore. |
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| However, none of the five states covered by the earlier package has opted to avail of it so far. On the other hand, some other states have been asking for a similar package to help mills pay full amount of statutory minimum prices (SMP). |
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| The earlier Rs 678.06 crore package was meant for Uttar Pradesh, Uttaranchal, Haryana, Punjab and Bihar, where the state governments announce the state-advised prices (SAP) for sugarcane supplied to the mills. |
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| The funds were proposed to be passed on to the private mills to help them pay the difference between the SMP and the SAP. |
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| The package was offered as a soft loan at a concessional interest rate of 4 per cent per annum, repayable in three years with an initial moratorium of three years. |
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| According to the details of the new package announced by the food ministry today, the government has decided to permit both SAP and non-SAP States to raise additional market borrowings to clear cane price arrears for the 2002-2003 sugar season. |
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| The interest liability to the extent of difference between the Coupon Rate on the bonds raised through additional market borrowings and 4 per cent (the rate at which the loan is being extended to the SAP-states) would be borne by the Union government. |
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| The state governments will, in turn, give 10-year loans to sugar factories with a ceiling interest rate of 4 per cent per annum. |
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| This loan will have a moratorium on repayment of principal and interest for a period of 5 years and will subsequently be repayable in five equal installments. |
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| This facility will be available to all sugar factories in the non-SAP states and to the factories in the cooperative and public sectors in the SAP states. |
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| The extent of open market borrowings by a particular state will be determined on the basis of cane price arrears for 2002-2003 sugar season. |
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The ministry
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