The Rs 6,000-crore of loan announced by the Union Cabinet for the sugar industry, with a one year moratorium, will not address the basic problem of surplus sugar and depressed sugar prices, said A. Vellayan, president, Indian Sugar Mills Association (ISMA).
In a statement, he said the decision of the government to bear the interest on the loan for just one year against five years in the previous scheme announced in February 2014, was actually not an interest-free loan in the true sense.
“To expect the industry to repay the loan of Rs. 6000 crore after one year is actually expecting the industry to make profits to the tune of Rs. 6000 crore within a year, which does not seem to be possible with a surplus of over 10 million tons and depressed sugar prices of around Rs. 10 per kilo below the cost of production,” Mr. Vellayan said.
