The Hindu Business Line : Implement sugar package in ‘letter & spirit’, bank chiefs told

The Union Finance Minister, Mr P. Chidambaram, on Tuesday advised public sector banks to implement the scheme for extending financial assistance to sugar undertakings, popularly described as ‘sugar package’, in “letter and spirit”.

He has also asked banks that have not implemented the ‘sugar package’ to submit a final report in the next 10 days to the Finance Ministry on the status of its implementation.

“PNB has done it and they have given the list of sugar companies in which they have implemented the sugar package. Indian Bank and Indian Overseas Bank have done it. Other banks have been advised to complete the exercise and send us a final report on how many sugar mills have been given the facilities contemplated in the sugar package,” Mr Chidambaram told reporters after a meeting with chief executives of public sector banks (PSBs) here today.

The Government had come out with a “Scheme for extending financial assistance to sugar undertakings 2007” to improve the liquidity position of the sugar undertakings. An improvement in the liquidity position would enable them to clear cane price arrears of 2006-07 and 2007-08 sugar seasons related to statutory minimum price (SMP).

Official sources said that the objective of the scheme was to enable banks to give loans to the sugar undertakings in lieu of excise duty on sugar and obtain interest subvention from the Government on the loan.

Meanwhile, Mr Chidambaram said that the final report would reach the Finance Ministry latest by February 22, and that in the next 10 days the sugar package would be implemented for all sugar mills that applied for benefits under the package.

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