New Delhi, June 5 (PTI): The government today said it was examining the possibility of giving additional interest-free loans of Rs 4,400 crore to cash-starved sugar mills to clear dues to cane farmers.
It is also looking at hiking the sugar import duty to 40 per cent from 15 per cent to curb cheap imports and increase ethanol blending in petrol to 10 per cent to improve the liquidity of mills.
“The main concern raised was how to clear Rs 11,000 crore sugarcane dues to farmers at the earliest. A suggestion has been made to extend loans given equivalent to the excise duty paid by the mills in the past three to five years,” food minister Ram Vilas Paswan told reporters after an informal meeting with other cabinet ministers.
“Each minister has given suggestions. We have not yet taken any decision. We will discuss among ministries and with the Prime Minister what we can do best for the benefit of both farmers and mills. A cabinet note will be prepared accordingly,” he added.
In December, the government had approved Rs 6,600 crore interest-free loans to the industry exclusively for clearing cane arrears. It decided to give loans via banks equivalent to the excise duty paid by the mills in the past three years.
A senior food ministry official said if loans against excise duty were extended by two years it would mean that mills could get additional interest-free loans of Rs 4,400 crore from banks. This will improve their cash flow.