The Union Government has extended major financial support to revive distressed Cooperative Sugar Mills (CSMs) through a Central Sector scheme implemented via the National Cooperative Development Corporation (NCDC), Union Minister for Cooperation Amit Shah informed the Lok Sabha on Tuesday.
In a written reply, Shah said the Ministry launched the “Grant-in-Aid to NCDC for Strengthening of Cooperative Sugar Mills” to address operational and financial stress in the sector. A third-party evaluation of the scheme revealed that 102 out of 312 cooperative sugar mills were non-functional, following which the Centre, in consultation with State governments, initiated efforts to revive viable units.
Under the scheme, the Central Government provided Rs 1,000 crore as grant-in-aid to NCDC, enabling it to leverage loans of Rs 10,000 crore for cooperative sugar mills. As of now, Rs 10,005 crore has been disbursed to 56 cooperative sugar mills.
Of the total assistance, Rs 9,656.90 crore was released as working capital, Rs 251.40 crore for ethanol plants and Rs 97.12 crore for cogeneration power projects.
Shah said a third-party impact assessment found that NCDC loans were offered at lower interest rates than other lenders, leading to reduced cane arrears and ensuring timely payments to farmers and workers. The scheme does not include any interest subvention component.