Sick state sugar coops on death row

Chief minister Vilasrao Deshmukh today indicated that all sick sugar co-operatives, failing the eligibility criteria for the financial package announced by the National Bank for Agricultural and Rural Development (Nabard), would be liquidated to avoid incurring further interest on loans of these sick units.

Addressing a press conference after the weekly cabinet meeting today, Deshmukh said, "The cabinet today adopted a new leasing policy for liquidated sugar co-operatives. Sugar co-operatives with a daily crushing capacity of 1,200 metric tons (mt) and above will be leased out at Rs 50 lakh per annum in Vidarbha and at Rs 15 crore per annum in Marathwada and western Maharashtra," he said.

He further said that a sugar co-operative with a crushing capacity of 2,500 mt or more will attract a lease rate of Rs 1 crore in Vidarbha, Rs 2 crore in Marathwada and Rs 3 crore in western Maharashtra.

"While deciding the lease rates, many factors were taken into consideration such as availability of sugarcane, percentage of sugar extract from sugarcane etc," he said.

Deshmukh further said, "There are 14 sugar co-operatives ready for liquidation and another 92 declared sick. We are in process of deciding how many among the sick units are eligible for the Nabard package and the rest will be liquidated."

The state government also announced a change in the policy of levying tax on lottery. Earlier sales tax was collected on the sale of lottery tickets. Now lottery dealers will have to pay tax on the prize amount. This move is expected to bring Rs 100 crore per year to the state's kitty. Earlier, the state was hardly getting around Rs 4-5 crore per year from lottery sale.

The cabinet also cleared the proposal to set up two additional sales tax tribunals in Mumbai to bring down pendency of such cases which has reached 8,000 and nearly Rs 8,000 crore is locked in these disputes.