The Uttarakhand government has decided to abolish the 2 per cent VAT being levied on sugar and waive off an accumulated loan amount of about Rs 498 crore held by all the 6 sugar mills in the government sector, a move signalling the government’s aim to revive the loss-making sugar mills.

Chairing a review meeting of sugarcane development and sugar industry department here last week, Chief Minister Vijay Bahuguna directed the concerned officials to initiate necessary action for abolition of the 2 percent VAT on the sale of sugar by mills.

Bahuguna also asked the officials to take steps to convert the loan and interest of the sugar mills in its equities. There is a loan of Rs 271 cr and interest of Rs 227 cr due on the 6 government sugar mills. In this regard, the chief minister said the conversion of loan and interest on it to equities would not only increase the assets of the government but would also help the sugar mills get relief from the burden of the accumulated loan.

Expressing concern over non-payment of pending dues of sugarcane farmers by the sugar mills, Bahuguna asked the officials present to prepare an action plan for the turn around of the sugar mills and produce it before the Cabinet meeting on August 17 so that the process of payment of dues could be expedited.

Regarding dues of farmers on private sugar mills, the chief minister said he would shortly visit New Delhi to meet Union minister K T Tomas and would urge him to provide soft loans to them.

Asking the officials to prepare an action plan for improving the conditions of sick sugar mills in the state, Bahuguna asked the officials to launch efforts to modernise and revive them. However, if the revival of sick sugar mills is not feasible, he said, the possibility of running them under the public-private partnership (PPP) mode should be explored keeping in view the interests of their employees. In this regard, he also asked the officials to explore the possibilities of using byproducts of sugar to take the loss-making sugar mills out of red.

Bahuguna also directed the officials to set up co-generation facility of 12 Mw capacity each in Bajpur and Kichchha sugarmills where nearly Rs 200 cr investment is expected. He said the co-generation would also provide 24 Mw of electricity to the power-starved state. He said similar possibilities would also be explored in other.

source: BS


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