Relief for sugar industry: Modi-led Cabinet okays Rs 85-bn bailout package

Sources said Rs 12 billion would be the carrying cost for the building of the buffer stock

The Cabinet on Wednesday approved a Rs 85 billion bailout package for the sugar industry which includes Rs 45 billion soft loan for building ethanol production capacity and creating a 3 million tonne stockpile to soak up excess supply.

The Cabinet, headed by Prime Minister Narendra Modi, also approved a Rs 13 billion interest subversion on the loan to be provided for creating new ethanol production capacity as also expanding the existing one, sources said.

Ethanol-extracted from sugarcane will be used for blending in petrol and will provide cane farmers remunerative price for their crop. Ethanol doping in petrol will also help