The Union Cabinet has cleared a scheme of 6,600 crore rupees interest free loans to cash starved sugar mills.
Information and Broadcasting Minister Manish Tewari said that this loan will be utilized for making payment to cane farmers.
The decision in this regard was taken at the Cabinet Committee on Economic Affairs meeting held under the chairmanship of Prime Minister Dr. Manmohan Singh here last evening.
The sugar industry is facing financial problems due to higher cost of production and lower sugar prices in the wake of surplus production in the last few years.
Meanwhile, the Cabinet has also slashed the Minimum Export Price (MEP) of onion with immediate effect to 350 dollars a tonne from the existing 800 dollars per tonne.
Commerce and Industry Ministry in a statement said that this will not only help in arresting the sharp decline in prices realised by the farmers but would also make Indian export of onions more competitive in the international markets and thereby help in stabilizing the onion prices in the domestic markets by balancing the interests of both farmers and consumers.