Select Sugar Mills Benefit: Maharashtra Government Approves Loans Worth Rs 550 Crores for Six Factories
Mumbai, 5th June 2023: The Maharashtra state government has made a significant decision to provide loans totaling approximately Rs 550 crores to six sugar mills associated with leaders from the ruling BJP party.
Interestingly, after the National Cooperative Development Corporation rejected loan requests from these factories, the state government has decided to step in and offer assistance by taking on loans themselves.
Many sugar factories in the state have been facing financial difficulties due to fluctuations in sugar prices and mismanagement. Consequently, some factories are struggling to procure funds to pay sugarcane dues and the Fair and Remunerative Price (FRP) to the farmers. Certain BJP ministers and leaders had attempted to obtain margin money loans for working capital through the National Cooperative Development Corporation, a central government entity. However, the corporation rejected the loan proposals, citing non-compliance with the loan terms and conditions.
The corporation expressed willingness to provide loans if the state government guaranteed repayment. Consequently, in April, the Department of Cooperatives presented a proposal for loans amounting to Rs 1023.57 crore to the Cabinet. However, the proposal faced strong opposition from the Shinde group, certain BJP ministers, and departments of finance and planning, arguing that providing assistance to specific factories would tarnish the government’s reputation. Additionally, the opposition threatened to take the matter to court, demanding assistance for their own factories.
Given that most of the factories are undervalued and have their assets secured against previous loans, granting them new loans would burden the government entirely. Any legal action would further complicate matters for the government. Hence, instead of directly aiding the factories, the cabinet decided to establish a new policy and assist only those factories that meet specific criteria.
To implement this, a cabinet sub-committee was formed under the chairmanship of Minister for Cooperation Atul Save. According to the new policy, the committee has approved loans for factories that have not received loans from the National Cooperative Development Corporation and are not operating under leases, up to a limit of 70 percent of the total asset value.
However, the loan amount will be adjusted based on the loans obtained from State Bank, District Bank, and other banks, ensuring it falls within the remaining balance. In a recent committee meeting, a margin money loan of Rs 549 crores was approved for six factories.
Sources indicate that the loan sanction proposal has been sent to the Finance Department for final approval and will be implemented once approved. Notably, the government will raise this loan and then distribute it to the factories, assuming responsibility if repayment is not made.
Shock for Vikhe and Munde?
Reports suggest that the loan proposals for sugar factories associated with Revenue Minister Radhakrishna Vikhe-Patil and former minister Pankaja Munde have been excluded from this assistance proposal. Loan requests for Ganesh Cooperative Sugar Factory, Padmashri Vitthalrao Vikhe Patil Sugar Factory in Pravaranagar, and Vaijnath Cooperative Sugar Factory in Parli, Beed district, have allegedly been rejected. As these factories are said to be linked to Vikhe and Munde, a new controversy is likely to arise.
Assisted Factories
Farmers Cooperative Sugar Factory (Killari Ausa, Latur)
Shankar Cooperative Sugar Factory (Malshiras, Solapur)
Rameshwar Cooperative Sugar Factory (Bhokardan, Jalna)
Karmayogi Shankaraoji Patil Cooperative Sugar Factory (Indapur, Pune)
Nira-Bhima Cooperative Sugar Factory (Indapur, Pune)
Bhima Cooperative Sugar Factory (Mahol, Solapur)
