Govt to give bank loans to sugar mills at lower rate

The government has decided to give bank loans to sugar mills at a lower interest rate to help them tide over the crisis in the wake of falling prices of the sweetener, the Lok Sabha was informed today.

Sugar mills in private, public and cooperative sectors would be given bank loans under special guidelines that will also involve interest subvention, Minister of State for Finance S S Palanimanickam said in a written reply.

He said the Maharashtra Government had requested the Centre to waive excise duty on sugar and molasses due to the downward trend in their prices. The state chief minister had sought deferring the payment of excise for three years in case waiver was not possible, he said.

In a separate reply, Palanimanickam said Reserve Bank of India has instructed all scheduled commercial banks for the release of Rs 420 crore worth margin money as additional credit to the concerned sugar mills.

He said the government has created a buffer stock of 20 lakh tonnes of sugar involving a buffer subsidy of Rs 378 crore. "On creation of buffer stock, banks provide additional credit to sugar mills as no margin money is kept in respect of buffer stock," he added.

To another query, the minister said there was no proposal to increase the import duty on cotton.