Out of the Rs 6,000 crore soft loan approved by government to bail out the sugar industry, mills applied to avail loans for only Rs 2,700 crore. However, banks have been able to disburse only Rs 800 crore till the September 30 deadline and the rest Rs 1,900 crore is still to be given.
The Centre had in June approved Rs 6,000 crore soft loan for the 2014-15 season (October-September) to improve mills' liquidity position, which has been affected due to lower sugar prices and high cane rates.
"Mills applied for a soft loan of Rs 2,700 crore and the banks were to disburse this amount by September 30. However, banks have disbursed only Rs 800 crore.
"Keeping the interest of farmers in mind, banks have been given time till October 15 to disburse the rest Rs 1,900 crore loan to mills," a senior Food Ministry official told PTI.
Also Read
The arrears reduced substantially on account of a number of government measures such as the soft loan, hike in import duty and raising ethanol blending with petrol to 10 per cent so as to infuse liquidity into the sugar sector.
Sugar production is estimated at record 28.3 million tonnes in 2014-15 marketing year (October-September), as against 24.3 million tonnes in the previous year, while the total annual demand is pegged at 24.5 million tonnes.