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Friday, Jul 09, 2004

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Coop sugar sector needs tax holiday

Prakash Naiknavare

THE co-operative sugar industry, especially in Maharashtra, was expecting categorically relief measures for its rehabilitation and revitalisation in view of its tough time during last 3 years. In light of this expected background, the industry is surprised for not finding any mention of relief to this industry.

As is known, the country's sugar industry, with an annual turnover of Rs 30,000 crore, adds more than Rs 2,000 crore to the Government exchequer by way of revenues. Millions of farmers' lives are directly dependent on this industry. Therefore, it is very necessary to not only help this industry to survive but to emerge stronger in the days to come.

Maharashtra and the southern States sugar industry, facing problems due to severe drought during last three consecutive years, were expecting immediate relief in the form of restructuring and rescheduling of loans on the increased moratorium and period. Secondly, in line with the steel industry where fund worth Rs 5,000 crore has been created, the sugar industry restructuring/revitalising gund out of Government revenues is a must at this crucial hour. A long demand for categorising sugar Industry under "priority" sector is necessary for accessing easy credit in line with the food processing sector. The interest rate is required to be brought at a level 2 per cent higher than prime lending rate while our own Sugar Development Fund be made available at a reduced rate of interest of 4 per cent.

Ideally, Maharashtra and the Southern States Sugar Industry are in a dire need of tax holiday for at least the next three years to come out of the present glut.

Though there is no mention of this or any relief to this industry in the Budget Speech, we do hope that Government will come to extend its help by way of announcing relief package, which is expected to include excise relief on sugar molasses and duty differential for encouraging raw sugar imports as a short term measure.

We in the Co-operative Sector definitely are optimistic and would never give up hope of receiving helping hand from this farmer-friendly new Government at the Centre.

(The author is Managing Director, Maharshtra State Co-operative Sugar Factories Federation Ltd.)

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