Cabinet mulls Rs 6,000 crore more in soft loans to sugar mills

The total expenditure on the exchequer for the second set of interest subvention could be around Rs 1,300 crore

The Union Cabinet is likely to discuss a proposal on Wednesday for providing an additional Rs 6000-crore soft loan to sugar mills to increase their ethanol production capacities under an incentive scheme. The proposal may include non-molasses-based distilleries.      

Under the scheme, the government had last year announced a soft loan of Rs 4,400 crore, and provided an interest subvention of Rs 1,332 crore to the sugar mills over a period of five years, including a moratorium  of one year.

However, the food ministry had received 256 applications, seeking soft loans totalling Rs 12,000 crore. 

Of this, 114 applications, seeking loan amounts