The Centre has acceded to the demand of Maharashtra sugar growers for conversion of outstanding short margin loans of around Rs 1,200 crore to mid-term loans to be repaid over five years.
Maharashtra sugar cooperative leaders met officials of National Bank for Agriculture and Rural Development (NABARD) and the sugar commissioner recently to discuss the modalities.
Nationalist Congress Party leader Sharad Pawar had asked the Centre to help sugar farmers in Maharastra tide over the crisis of overproduction, falling prices and short margins in a high interest rate regime.
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Industry sources told Business Standard that the scheme had been given in-principle approval by the finance ministry and would be implemented after clearance from NABARD and Reserve Bank of India. The scheme would be applicable to Maharashtra only. Loans would be converted to medium term borrowings on case-to-case basis.
Eyes overseas markets
The sugar industry would aggressively explore the export market to liquidate stocks. S L Jain, director general of Indian Sugar Manufacturers Association (ISMA), said sugar exports would be around 1.5 million tonnes in the coming year despite tough competition from Thailand and Brazil and the European Union.