Bihar government today decided to draft a new sugar incentive policy within a month by rethinking over existing subsidy rate and imposing entry tax on outside sugar to boost production of sugar in the state.

The decision was taken at meeting of sugar producers and industry bodies with Chief Minister Nitish Kumar.

After hearing problems of sugar producers, Kumar ordered to prepare a new policy providing increased subsidy for sugar production than that existing now as per sugar production policy of 2006, Principal Secretary Sugarcane Sudhir Kumar told reporters.

The producers complained that they pay 12 per cent VAT and get 10 per cent subsidy. But those producing sugar outside and trading in into the state pay only two per cent Central Sales Tax, he said adding the participants demanded entry tax on outside producers.

The meeting was attended by many leading sugar mills of the country including Tirupati Sugar Mill, Birla group, Bharat sugar mills and Harinagar sugar mills. Representatives from CII and Bihar Chamber of Industries and Commerce were also present.

Accompanied by Deputy Chief Minister Sushil Kumar Modi, Power Minister Brijendra Yadav, Industry minister Renu Kumari and Chief Secretary A K Sinha, the CM discussed issues to boost production of sugarcane in the state.

Sudhir Kumar said the CM gave instruction to formulate new policy for manufacture of ethnol and spirit among others.

Young enterpreuner Deepak Yadak, CEO of Tirupati Sugars, said they are encouraged by the "free and frank discussion" with the CM on problems gripping sugar industries.

Bihar which produced 177.47 lakh tonnes of sugarcane in 2011-12 ranks fifth in the country after Uttar Pradesh, Maharashtra, Tamil Nadu and Karnataka.

But with scores of sugar mills lying closed, Bihar produced only 4.51 lakh tonnes of sugar in 2011-12 as compared to 89.96 lakh tonnes by Maharashtra, 69.96 lakh tonnes by UP and 37.57 lakh tonnes by Karnataka.

source: BS

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