In order to facilitate clearance of cane price arrears of previous sugar seasons and timely settlement of cane price of current sugar season to sugarcane farmers, the Central Government on Jan 3,2014 has notified a Scheme for Extending Financial assistance to Sugar Undertakings (SEFASU-2014) envisaging interest free loans worth Rs.6600 crores by bank as additional working capital to sugar mills. As on July 18,2014 loans amounting to Rs. 5914 crores have been sanctioned and out of this loans worth Rs. 5711 crores have been disbursed under the scheme. An scheme has been notified on February 28,2014 allowing incentives for marketing and promotion services for raw sugar production targeted for export market. The incentive available under the Scheme shall be utilized by the sugar mills for making payment to the farmers. The Government has also decided 5% blending of ethanol with petrol at all India level, which can go up to 10% in a State. This is expected to generate revenue for sugar mills enabling them to make timely and better payment of cane price to sugarcane farmers. Besides, soft loans to the sugar industry are being provided from sugar Development Fund for modernization, cane development, ethanol production and for bagasse based co-generation projects.
The Government, with a view to increase competitiveness and efficiency in the sugar sector, has already decontrolled it by doing away with the levy obligation on sugar mills and dispensing with the regulated release mechanism on open market sale of sugar.
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