CCEA nod for loans to sugar mills to clear cane price arrears

New Delhi, Dec 26: The Cabinet Committee on Economic Affairs (CCEA) today approved the guidelines for financial assistance to the sugar industry for payment of cane price arrears.

The financial assistance will be met fully from the sugar development fund.

Central government will provide an interest subvention up to 12 per cent at a simple rate of interest for the additional working capital loans to the sugar undertakings, equal to last three sugar seasons excise duty, cess and surcharge on sugar, to be provided by the banks.

The sugar undertakings with loans classified Non Performing Assets (NPA) by the banks will also be eligible for the loans provided the concerned state governments give guarantee for their new loans.

The interest subvention would be for a total loan duration of 5 years including 2 years moratorium period. No interest subvention to be provided for the period of default in the principal repayments.

The loans would be meant exclusively for effecting cane price payments by the sugar mills. (ANI)