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Majority of sugar mills in Karnataka commenced cane crushing on Sunday for the present sugar season (2014-15) as directed by the state government. Thereby, they have avoided penal action from the state government.
This follows the meeting between representatives of the South Indian Sugar Mills Association (SISMA) and Chief Minister Siddaramaiah at Kalaburagi on Friday. At the meeting, SISMA officials had discussed the financial situation of most of the mills and told the government that they were unable to pay cane arrears in one installment to farmers for the last sugar season, 2013-14.
The government had told mills to pay Rs 200 per tonne immediately and provided two years moratorium on the remaining Rs 200 per tonne. The government had also extended exemption from purchase tax and value added tax for a period of three years.
“The financial position of the factories is very bad. Hence, we have represented to the chief minister and sugar minister requesting for government assistance for mills. They have positively responded and requested to start the factories first. Keeping in view the assurance given by the chief minister and council of ministers, SISMA members restarted crushing,” Pawan Kumar, President, SISMA told Business Standard.
During their meeting with the chief minister, SISMA members also requested the government to provide a financial assistance to mills so as to enable them to meet the government’s directive on payment of arrears to farmers and start crushing immediately.
“The government told us to pay Rs 200 per tonne immediately and start crushing. But, we have told them that we are unable to pay over Rs 100 per tonne immediately. We have asked the government to give us a financial package and waiting for government assistance,” Kumar said.
Most of the mills had paid Rs 2,100 per tonne for 2013-14 as against the government’s price formula of Rs 2,500 per tonne. During the meeting last week, the sugar minister had mills to pay Rs 200 per tonne immediately and had promised to give them a moratorium of two years for another Rs 200 per tonne.
“However, we have told the government that those mills that have not paid Rs 2,100 per tonne will now pay Rs 100 immediately. For the balance Rs 200 per tonne, we have asked the government to give us an assistance package. The government has promised us. We are waiting for the government to announce a package,” SISMA president added.
There are 60 sugar mills in Karnataka with a capacity of 273,950 TCD (tonnes crushed per day).
