Maharashtra Government on Tuesday approved soft loan to the tune of Rs 108 crore for 58 loss- making spinning mills in the state.
A decision to this effect was taken at the weekly Cabinet meeting chaired by Chief Minister Prithviraj Chavan here. The soft loan is for a period of three years and will be interest-free after a period of one year. Later, the spinning mills have to repay the loan in three annual installments, official sources said.
The mills suffered losses because they had purchased cotton at very high rates, but later prices had come down drastically, they said. The cotton industry had also suffered due to an economic slowdown. The loan will be given against production of these spinning mills (Rs 20 per kg) in the period from April to September 2011.
