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The Union Cabinet and its empowered arm, the Cabinet Committee on Economic Affairs (CCEA), met separately on Thursday to clear a number of decisions.
The CCEA cleared the modalities for implementing the earlier decision on a Rs 6,600-crore interest-free loan package for sugar mills. A senior official said the loans would be disbursed through a separate bank account to ensure the utilisation was monitored. A nodal bank would also be appointed for this.
The interest burden, estimated at Rs 2,750 crore over the next five years, will be borne by the government from the Sugar Development Fund. The loans will be provided by banks exclusively for making payment to sugarcane farmers, including arrears. The loans would be equivalent to the excise duty, cess and surcharge on sugar paid by the mills in the past three years.
Mills have to repay the loans in five years and can avail of a moratorium on repayment for the first two years. “No interest subvention (is) to be provided for the period of default in the principal repayments,” an official statement said. Loans will be given to mills functional during the 2013-14 season (October-September).
Those with loans classified as non-performing assets by the banks will also be eligible, provided the state governments concerned give a guarantee. All loans sanctioned by June 30, 2014 ,and disbursed by September 30, 2014, by the lending banks would be covered under the interest subvention facility.
The lending will be subject to the various norms on scrutiny, future cash flows of five years, establishing the viability and debt servicing capacity, including the restructuring guidelines, as notified for the sugar industry from time to time. The loans will be backed by security and collateral of the unit availing it, including personal guarantees and other assets of promoters which are free from encumbrances.
The Rs 80,000-crore sugar industry has been facing a cash crunch due to higher cost of production and lower selling prices, in the wake of surplus output over the past few years. Providing interest-free loans was one recommendation of the group of ministers set up by the Prime Minister under the chairmanship of Agriculture Minister Sharad Pawar to address the industry's cash crunch.
The CCEA cleared the modalities for implementing the earlier decision on a Rs 6,600-crore interest-free loan package for sugar mills. A senior official said the loans would be disbursed through a separate bank account to ensure the utilisation was monitored. A nodal bank would also be appointed for this.
The interest burden, estimated at Rs 2,750 crore over the next five years, will be borne by the government from the Sugar Development Fund. The loans will be provided by banks exclusively for making payment to sugarcane farmers, including arrears. The loans would be equivalent to the excise duty, cess and surcharge on sugar paid by the mills in the past three years.
Mills have to repay the loans in five years and can avail of a moratorium on repayment for the first two years. “No interest subvention (is) to be provided for the period of default in the principal repayments,” an official statement said. Loans will be given to mills functional during the 2013-14 season (October-September).
Those with loans classified as non-performing assets by the banks will also be eligible, provided the state governments concerned give a guarantee. All loans sanctioned by June 30, 2014 ,and disbursed by September 30, 2014, by the lending banks would be covered under the interest subvention facility.
The lending will be subject to the various norms on scrutiny, future cash flows of five years, establishing the viability and debt servicing capacity, including the restructuring guidelines, as notified for the sugar industry from time to time. The loans will be backed by security and collateral of the unit availing it, including personal guarantees and other assets of promoters which are free from encumbrances.
The Rs 80,000-crore sugar industry has been facing a cash crunch due to higher cost of production and lower selling prices, in the wake of surplus output over the past few years. Providing interest-free loans was one recommendation of the group of ministers set up by the Prime Minister under the chairmanship of Agriculture Minister Sharad Pawar to address the industry's cash crunch.
SFCI to merge with National Seeds Corporation
The Cabinet cleared a proposal to amalgamate State Farms Corporation of India (SFCI) with National Seeds Corporation (NSC), both wholly owned public sector undertakings. The amalgamated entity will serve the interest of the farmers and the changing requirements of the Indian agricultural sector in a more effective way.
The would help in achieving a goal to provide quality, affordable seeds to every farmer even in the remotest parts of the country. This effort will ensure last mile availability of seeds at economical price for a large number of subsistence farmers in India, an official statement said.
With the present growth rates, profitability and synergy, the combined turnover of the two companies would increase from the present Rs.1180 crore to Rs 2,046 crore by 2017 and Rs 3,112 crore by the year 2020. The merged entity is expected to occupy the prime position in the Indian seed industry by year 2020.
Pension proposal for MTNL employees
The Cabinet approved a pension proposal for 43,000 MTNL employees, who joined the public sector company from Department of Telecom, that would cost the government an estimated Rs 500 crore annually. The decision is likely to bring additional amount of about Rs 1,500 crore (including interest) in the books of MTNL as refund from government for the pension that the PSU paid to its employees.
Sick PSUs to be given Rs 116 cr for wage payments
CCEA cleared a proposal in this regard. PSUs will inclulde Hindustan Machine Tools (HMT). "CCEA approved the proposal for providing non-plan budgetary support of Rs 116.86 crore for liquidation of statutory dues (Provident Fund, Gratuity, Pension, Employees State Insurance and Bonus) and salary and wages from 01-04-2013 to 31-08-2013 in respect of 11 Central Public Sector Enterprises," an official statement said.
Other PSUs which will get this fund are-- Hindustan Cables, HMT (Watches), HMT (Chinar Watches), Nagaland Pulp & Paper, Triveni Structurals, Tungbhadra Steel Products, Nepa Ltd, HMT Bearings, Hindustan Photo Films and Tyre Corporation of India, it said.
Other decisions:
i) To set up National Cancer Institute at a cost of Rs 2,035 crore in the Jhajjar (Haryanna) campus of All India Institute of Medical Sciences (AIIMS). New Delhi located in Badhsa village, Jhajjar, Haryana.
ii) A Rs 640 crore welfare scheme for fishermen. The scheme, to be implemented in the 12th five year plan (till March 31, 2017), will provide basic amenities like drinking water and sanitation in fishers' villages among other things.
