The Centre has extended a major financial lifeline to the cooperative sugar sector by enabling Rs 10,000 crore in loans for distressed Cooperative Sugar Mills (CSMs) through the National Cooperative Development Corporation (NCDC), Union Minister of Cooperation Amit Shah informed the Lok Sabha.
Under the Central Sector Scheme “Grant-in-Aid to NCDC for Strengthening of Cooperative Sugar Mills”, the Ministry provided a one-time grant of Rs 1,000 crore to NCDC in two instalments during 2022-23 and 2024-25. This support allowed NCDC to raise market borrowings and disburse Rs 10,005 crore to 56 cooperative sugar mills across the country by March 31, 2025.
The funds were used for working capital needs and for setting up ethanol and cogeneration plants, helping mills stabilise operations. In Maharashtra, one mill in Ahmednagar expanded its ethanol capacity from 45 KLPD to 100 KLPD, achieving zero liquid discharge.
A third-party evaluation found that lower-interest, transparent NCDC financing significantly reduced pending cane bills, ensured timely payments to farmers and workers, improved cane availability, and enhanced productivity and efficiency of cooperative sugar mills.