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The Cabinet Committee on Economic Affairs (CCEA) has given its nod for the guidelines for financial assistance to the sugar industry for payment of cane price arrears.
The financial assistance will be met fully from the sugar development fund.
The Centre will provide an interest subvention up to 12 per cent— at a simple rate of interest — for the additional working capital loans to the sugar undertakings.
The additional working capital loans to be provided by banks will be equivalent to last three sugar seasons excise duty, cess and surcharge on sugar (including notional equivalence for exports or availed Cenvat).
Sugar undertakings with loans classified as non performing assets (NPA) by banks will also be eligible for the loans so long as the state governments concerned give guarantee for their new loans.
The interest subvention would be for a total loan duration of five years, including two years moratorium period. No interest subvention will be provided for the period of default in the principal repayments.
The loans would be meant exclusively for effecting cane price payments by the sugar mills.
srivats.kr@thehindu.co.in
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