In a relief to sugar mills resorting to distress sales, the government on Thursday approved an export subsidy on raw sugar for the current production season. Sugar mills will be allowed to export 1.4 million tonnes (mt) of raw sugar and can avail of a subsidy of Rs.4,000 per tonne, the Cabinet Committee on Economic Affairs (CCEA) said in a statement.
The export incentive is for the production season 2014-15 (October to September) and will help sugar mills clear dues to cane growers, the CCEA, headed by Prime Minister Narendra Modi, said. In February 2014, the government had announced an export subsidy of Rs.3,300 per tonne for 4 mt. But only 750,000 tonnes were actually exported under the scheme.
The Indian Sugar Mills Association (ISMA) welcomed the government’s decision. “At the current global and domestic prices, raw sugar exports from India is just about viable with the incentives,” said Abinash Verma, director general of ISMA.
“As per our estimates, there is surplus sugar of around 2.5 mt and therefore the industry will require incentives for another 1-1.5 mt. This is the only way for the industry to pay cane price even at the FRP (fair and remunerative price) level this season; otherwise cane price arrears (to growers) which are at Rs.12,300 crore will very soon cross Rs.13,000 crore, (the peak) recorded in last season,” he said.
According to ISMA, the industry’s debt burden has more than tripled from Rs.11,443 crore in 2007-08 to Rs.36,601 crore in 2012-13. Local mills are expected to produce 26 mt of sugar?this year against a domestic demand of 24.7-24.8 mt.
In another decision, CCEA approved the widening of four highways: the six-laning of the 145km Chakeri-Allahabad section of National Highway (NH) 2 in?Uttar?Pradesh, worth Rs.1,999.85 crore; 137km Baleshwar-Chandikhole section of NH5 in Odisha worth Rs.2,296.82 crore; and 72.4km Handia-Varanasi section of NH2 in Uttar Pradesh worth Rs.2,378.59 crore. CCEA also approved the four- and six-laning of the 127km Raipur-Bilaspur section of NH130 in Chhattisgarh worth Rs.1,963.88 crore.
Source:livemint.com
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