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New Delhi June 1 The Uttar Pradesh Government under Ms Mayawati has scrapped her predecessor administration's Sugar Industry Promotion Policy of 2004, compounding uncertainties for a currently beleaguered industry.

"The Cabinet has today decided to scrap the 2004 policy (of Mr Mulayam Singh Yadav's Government) with immediate effect," the Cabinet Secretary, Mr Shashank Shekhar Singh, said in Lucknow on Friday.

He added that a new sugar policy would be formulated, taking into account the interests of cane farmers and ensuring more effective use of the State's fiscal resources.

The 2004 policy had announced several sops for setting up new mills in Uttar Pradesh, including a 10 per cent capital subsidy; reimbursement of transport cost of sugar from the factory upto a distance of 600 km from the border; remission of stamp duty and registration charges on land purchase; reimbursement of cane purchase tax and society commission; and exemption of entry tax on sugar and trade tax on molasses.

All these were to be given for five years subject to a company/group investing a minimum of Rs 350 crore, and for 10 years for investments of Rs 500 crore and above.

The incentives had led to 29 new factories being commissioned between 2004-05 and 2006-07, involving an additional daily cane crushing capacity of over 2,00,000 tonnes (tcd). Inclusive of brownfield expansions, the aggregate investment would be over Rs 6,000 crore, with the bulk of it coming from Bajaj Hindusthan, Triveni Engineering and Balrampur Chini.

The Bajaj Hindusthan group is further setting up another four new mills of 41,000 tcd in the coming 2007-08 season, with Balrampur putting up two more of 16,000 tcd and Oudh Sugar Mills one of 7,000 tcd.

More Stories on : Sugar | Agricultural Policy | Politics

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