The recent endeavours of the Sugar Co-op Federation in negotiating the restructuring of outstanding loans from the Sugar Development Fund have borne fruit, marking a significant milestone in alleviating financial burdens for cooperative sugar mills nationwide.
In a landmark development unveiled on February 28, 2024, the central government, under the guidance of Union Finance Minister Nirmala Sitaraman, has extended substantial relief to 33 cooperative sugar mills.
This relief comes in the form of restructuring outstanding loan amounts totalling Rs. 1378 crore, as confirmed by the newly appointed President of the National Federation of Cooperative Sugar Factories (NFCSF), Harshvardhan Patil.
Among the states affected by these loans, Maharashtra shoulders the largest burden with Rs. 861.23 crore, followed by Uttar Pradesh with Rs. 202.48 crore, Tamil Nadu with Rs. 113.15 crore, Karnataka with Rs. 103.20 crore, and Gujarat with Rs. 39.37 crore.
The remaining balance is distributed across other states, including Andhra Pradesh and Odisha. Of the total outstanding sum, Rs. 566.83 crore represents the principal amount, while Rs. 191.79 crore accounts for accrued interest, with an additional Rs. 619.43 crore in interest charges.
Notably, the revised guidelines waive this additional interest entirely, with the remaining principal and accrued interest being rescheduled for payment over a period of seven years. Furthermore, no instalments are due for the initial two years, with repayment commencing in the third year.
In addition to loan restructuring, the government has introduced a one-time repayment scheme for outstanding Sugar Development Fund loans, allowing mills to settle their debts within a six-month timeframe. To ensure the seamless implementation of these initiatives, a committee comprising senior officials and experts from the Ministry of Food has been established.
President Harshvardhan Patil emphasizes the profound relief these schemes will offer cooperative factories nationwide, coupled with enhanced access to government support programs.
He further expresses NFCSF’s commitment to advocating for diverting a portion of GST revenue to the Sugar Development Fund and ensuring the success of the one-time repayment scheme.