Food minister Shanta Kumar today said the government intended to use the Sugar Development Fund for providing freight subsidy for sugar exports as well as for financing projects for co-generation of power and manufacture of down-the-line by-products to improve the economy of the sugar industry.
The basic objective of the move was to improve the export competitiveness of the Indian sugar industry. Already about 1.2 million tonne of sugar had been exported this year. A further boost to exports was needed, he said while addressing the conference of the editors on social sector issues.
Kumar said the sugar industry could produce about 5000 MW of power by using its by-product bagasse. The industry could also produce anhydrous alcohol or ethanol for use as auto fuel after mixing with motor spirit.
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The government proposed to amend the Sugar Development Fund Act, 1982, and the sugar development fund rules (SDF rules) framed under this Act in 1983.
The amended norms would allow disbursal of loans for facilitating bagasse-based co-generation of power, production of anhydrous alcohol and ethanol and defraying expenditure on internal transport and freight charges on export shipments of sugar.
The new provisions would also permit loans on concessional terms for the rehabilitation of potentially viable sick sugar mills. Besides, provision would be made for using buffer subsidy to clear cane price payments, including arrears, to sugarcane growers.
The Sugar Development Fund draws its resources from the cess of Rs 14 a quintal levied on sugar production under the Sugar Cess Act, 1982. Between 1982-83 and 2000-01, a total cess amount of Rs 2785.68 crore has been collected. Of this, Rs 2,566 crore have been transferred to the fund till March 2001. However, after taking care of the utilisation over the years, the fund had a net corpus of Rs 1,232.92 crore on March 31, 2001.
The minister claimed that the cane price arrears payable to the farmers by the industry had come down from about Rs 8.3 crore in 1995-96 to Rs 4.5 crore in 2001-02.
He said the government was moving towards total decontrol of sugar. It had already brought down the sugar levy from 40 per cent to a mere 15 per cent. However, sugar entitlement of the poor under the public distribution system had been raised.