Maharashtra govt imposes Rs 100 per tonne penalty on mills that start crushing before Oct 15

The Maharashtra government has decided to advance the beginning of the sugarcane crushing season to October 15 from the earlier stated November 1. The government also said any mill that starts crushing before this date would attract a fine of Rs 100 per tonne, even as the sugar industry has lowered production estimates to 5.5 million tonnes (mt) for the new season.

Mills paying less than the fair and remunerative price (FRP) of Rs 2,058 per tonne would also be fined. These decisions were taken to achieve the optimum use of limited sugarcane to happen during the 2012-13 crushing season and also to avoid its transfer to those mills offering lucrative prices and thereby causing trouble to local mills.

The sugar industry has further lowered production estimates to 5.5 mt from six mt projected early September in the state. The scanty rainfall in the cane growing areas in particular has affected cane production and on top of it nearly 25 mt of sugarcane has been diverted to fodder in the scarcity-hit areas.

Chief Minister Prithviraj Chavan on Monday reviewed the cane scenario and the output projections with the cooperative department, sugar commissioner and representatives of the Federation of Cooperative Sugar Factories (FCSF), the representative body of over 170 mills.

According to the industry’s latest estimates, only 54.5 mt of sugarcane would be available to produce 5.5 mt of sugar. About 100 cooperative sugar factories are expected to take part in the current year’s crushing season. A state government official said Maharashtra had produced 8.96 mt of sugar after crushing 77.1 mt of sugarcane during 2011-12.

“The government will appear tough and impose penalty of Rs 100 per tonne on non-compliant mills. The exact estimates will be known after crushing begins,” Vijaysinh Mohite-Patil, chairman of FCSF in Maharashtra told Business Standard. He added a committee, chaired by the chief minister, had already clarified that mills would attract penalty if they failed to pay sugar prices below FRP,”

He said the federation and the state government would make a fresh appeal to the Centre to remove a 10 per cent import duty imposed on raw sugar. “We feel mills can import raw sugar, refine it and make up for fall in the sugar production due to less cane availability.”

The government official said a fall in sugar output would result in decline in the tax paid to both the Central and state governments as well. Cooperation Minister Harshavardhan Patil had recently told Business Standard the tax payment would be reduced to Rs 1,500 crore in 2012-13, compared with the total tax payment of Rs 4,600 crore in 2011-12. These taxes include sugar cess, sugarcane purchase tax, excise and contribution towards chief minister’s fund.

Meanwhile, a number of public sector banks, including State Bank of India, Bank of India, Punjab National Bank, Central Bank of India and Canara Bank have come forward to provide pre-seasonal loans to sugar factories. Instead of approaching Maharashtra State Cooperative Bank and district central cooperative banks, sugar factories have availed of loans from public sector banks.

source: BS

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