The Cabinet Committee of Economic Affairs (CCEA) today has approved a subsidy of Rs. 55 per tonne or Rs. 5.5 per quintal for sugarcane farmers. This has been done in view of the arrears that have surged to a whopping Rs 20,000 crore because of sharp reduction in case sugar prices.
Interestingly, the move has been implemented just 10 days ahead of Karnataka polls slated for May 12. Karnataka ranks among the leading producers of sugarcane in the country.
The subsidy amount as per the Director General of ISMA Abinash Verma can be in the range of Rs 1,500-1,600 crore depending on the amount of sugarcane crushed by the millers during the ongoing 2017-18 marketing year (October-September).
Early last month some of the steps discussed upon to lessen the woes of sugar millers included production linked subsidy, cess implementation or reduction of GST on ethanol.
India's sugar production has hit record levels of 29.98 million tonne (MT) till April 15 due to record cane output which resulted in an increase in arrears at over Rs 20,000 crore for farmers. While, the annual demand for sugar is estimated at 25MT.
The other steps by the government to check the issue include doubling of import duty to 100% as well as withdrawing the earlier export duty to prevent any further price fall of sugar.
With PTI Inputs