The Hindu : Sugar mills seek sops

Online edition of India's National Newspaper
Wednesday, Feb 26, 2003

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Business

Sugar mills seek sops

By Our Special Correspondent

COIMBATORE FEB. 25. With a number of sugar mills on the verge of closure due to poor realisation of prices, the Indian Sugar Mills Association ( ISMA) has appealed to the Central Government to initiate appropriate measures to save the industry and also the rural economy.

The President of the association, S. V. Balasubramaniam, told a press conference here on Monday that of the total 540 sugar mills in the country, only 450 were operational.

The major reason was overproduction during successive years, heavy opening stocks of 100 lakh tonnes and frequent hike in cane price by the Government without regard to the end product's price realisation.

He pleaded for permitting the sugar factories to retain the taxes on sugar such as excise duty, additional excise duty, Central cess as well as excise duty on molasses, totally working out to about Rs. 100 per quintal, "at least for two years.''

As the Exchequer had been getting thousands of crores of rupees from the sugar industry, "it would be only reasonable to expect this relief in it hour of crisis.''

He pleaded for dropping the proposal of double taxation on sugar from June 1 this year, which would continue the Centre's additional excise duty while authorising the State governments to charge sales tax on sugar, thus causing an additional tax burden of Rs. 500 a tonne.

Besides, the relief already granted to the co-operative sugar mills of converting the deficits in their cash credit account into working capital term loan, recoverable in instalments over five years, should be extended "immediately'' to the private mills also.

Mr. Balasubramaniam urged the Centre to activate the mechanism of "regulated release'' so as to bring about stability in sugar prices.

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