The National Federation of Cooperative Sugar Factories (NFCSF) secured a win for sugar mills across India. The central government agreed to restructure outstanding loans taken from the Sugar Development Fund (SDF), bringing relief to struggling cooperative sugar mills, particularly the 33 with the highest amount of debt.
Announced on February 28, 2024, the revised guidelines offer a restructuring package for a total of Rs. 1378 crore in outstanding loans. The principal amount (Rs. 566.83 crore) and interest (Rs. 191.79 crore) will be rescheduled for repayment over seven years.
The government will entirely waive off the additional interest of Rs. 619.43 crore. Repayments will be deferred for the first two years, with a moratorium period, and will commence in the third year.
NFCSF President, Shri Harshvardhan Patil, praised the government’s decision, highlighting the positive impact on cooperative sugar factories. The new structure will ease their financial burden and make them eligible for other government schemes.
The NFCSF is also exploring ways to divert a portion of the Goods and Services Tax (GST) to the SDF for continued support of the sugar industry.
The government also introduced a one-time settlement scheme for outstanding SDF loans. Mills can repay their dues in full within six months to avail of this option.
A committee comprising senior officers and experts from the Ministry of Food has been formed to oversee the implementation of both these schemes.
Maharashtra has the highest amount of outstanding SDF loans at Rs. 861.23 crore, followed by Uttar Pradesh (Rs. 202.48 crore), Tamil Nadu (Rs. 113.15 crore), Karnataka (Rs. 103.20 crore), and Gujarat (Rs. 39.37 crore).
The restructuring of SDF loans and the introduction of a one-time settlement scheme are positive developments for the Indian sugar industry. These measures will provide much-needed financial relief to cooperative sugar mills, potentially leading to their revival and long-term sustainability.