New Delhi, March 3: The government today notified an export subsidy of Rs 3,300 per tonne on raw sugar shipments during February-March this year.
“The incentive shall be at the rate of Rs 3,300 per tonne for February and March, and thereafter, be recalculated every two months after taking into account the average exchange rate of rupee vis-à-vis the dollar,” the notification said. A maximum of 4 million tonnes will get relief.
Raw sugar produced and exported during 2013-14 and 2014-15 marketing years (October-September) are eligible for subsidy.
The cabinet committee on economic affairs had earlier approved a proposal to export surplus sugar and stabilise domestic prices, which hit a five-year low in recent weeks.
The Indian Sugar Mills Association welcomed the decision. It expects the move to provide much needed liquidity to the sugar mills and help them to pay the cane dues of farmers that have already crossed Rs 10,000 crore from about Rs 3,000 crore at the start of the current marketing year in October 2013.
According to the notification, sugar mills should utilise the incentive to pay farmers within three months of the receipt of the subsidy. Mills are required to submit a utilisation certificate within a month.
India, the world’s second-biggest sugar producer, is sitting on a huge stock of the sweetener. This year, the output is likely to be 25 million tonnes against the domestic demand of 23.5 million tonnes.
Analysts said the move was likely to benefit the reeling coalition. Mill owners are close to the Congress allies, while farmers are part of the vote base of Sharad Pawar’s NCP and Ajit Singh’s Rashtriya Lok Dal.