NCDC is a statutory corporation under ministry of cooperation, which has been helmed by Union home minister since it came into existence in 2021.
The loan amount has been sanctioned based on a floating rate of interest. The loan is for eight years, including a moratorium period of two years on repayment of principal amount. However, there is no moratorium on payment of interest.
Similar loans were sanctioned for the ailing mills before the Lok Sabha elections, too.
The highest amount of Rs 350 crore has been sanctioned for Kisanveer Satara Co-operative Sugar Factory Ltd at Buinj in Satara district, linked to an an NCP politician, and Shree Tatyasaheb Kore Warana Cooperative Sugar Factory Ltd at Warananagar in Kolhapur district, which is related to a BJP MLA’s associate.
The ailing sugar mills are unable to raise the working capital, which is mainly spent on maintenance, salaries, pension and dues of sugarcane farmers etc.
Vijay Autade, a sugar industry expert, said, “The loan cannot be used for developing new infrastructure. It is to be used for paying salaries and carrying out maintenance work. Many sugar factories are facing challenges which need concentrated effort. Otherwise, the mills will face a revenue deficit and seek loans every time they fall into a crisis.”
P G Medhe, another industry expert, said it was necessary to increase the minimum selling price of sugar to Rs 42 per kg and revise the rates of ethanol to ensure the mills are out of the red. “In last five years, the remunerative price to sugarcane farmers has increased five times, from Rs 2,750 to Rs 3,450 per tonne, but the MSP of sugar has not been raised. The mills have been bearing losses of Rs 500 to Rs 600 per tonne, and therefore, remain in spiralling debt,” said Medhe.
