The UP government has scrapped the state's Sugar Industry Promotion Policy, 2004 with immediate effect. |
"The state cabinet has decided to replace it with a new one that would be announced after 15 days. The new policy will be in consultation with the stakeholders and will take into account the investments that were made under the previous policy," said Arvind Raj Singh, the state sugar secretary. |
Companies like Bajaj Hindusthan, Balrampur Chini Mills, Triveni Engineering and Industries, among others, had made investments worth Rs 5,000 crore in UP to set up 28 sugar mills under the 2004 policy. |
The policy included incentives like 10 per cent capital subsidy on investments; remission of stamp duty and registration charges on land purchase; reimbursement of transport cost from factory up to a distance of 600 km from the state's border, and, reimbursement of additional cost of cane transport from out-centres to factory gates. |
These sops were to be given for a five-year period to any company investing a minimum of Rs 350 crore and for 10 years in case the investment is of Rs 500 crore or more. |
"How can the government scrap a policy without giving a valid reason for it? The industry is concerned and there is uncertainty over the new policy, which may take away some of the concessions announced earlier," said an executive of a sugar company that invested about Rs 1,000 crore in the state after the 2004 policy. |
"We have no clue of what will follow. The industry has been left high and dry," said Sanjay Tapriya, director (finance) of Simbhaoli Sugar Mills, which had invested Rs 350 crore in the state. |
However, according to other, the scrapping of the 2004 policy is a blow to the business houses which enjoyed proximity to the previous Mulayam Singh Yadav-led government. The earlier sugar policy was, allegedly, to favour Bajaj Hindusthan Sugar mills. |
State Cabinet Secretary Shashank Shekhar said the cabinet expressed concern over the losses to the tune of Rs 13,500 crore incurred by the PSU and cooperative sector sugar mills. |
He said the cabinet had also taken a policy decision to privatise the loss-making state-run mills if their turnaround was not possible. |
''The new (Mayawati-led) government is of the view that the existing policy is not suited for the growth of the sugar industry and does not ensure welfare of the farmer community,'' Shekhar said. |