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New Delhi, Mar 7 (UNI) The Cabinet on Thursday gave its approval for funds amounting to Rs 2,790 crore towards interest subvention for extending indicative loan amount of Rs 12,900 crore by banks to the sugar mills under “Scheme for extending financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity” for the 268 applications/proposals.
These funds are in addition to Rs 1,332 crore already approved by the Cabinet Committee on Economic Affairs in June, 2018, Union Finance Minister Arun Jaitley told reporters here.
Mr Jaitley said the CCEA has approved Rs 565 crore towards interest subvention for extending indicative loan amount of Rs 2,600 crore by banks to the molasses based standalone distilleries to augment capacity through installation of incineration boilers and other methods in the existing distilleries for achieving ZLD and additional equipment for ethanol production as well as for setting up of new standalone distilleries for ethanol production.
A separate scheme for the molasses based standalone distilleries would be formulated accordingly by Department of Food and Public Distribution.
Both the interest subvention would be payable at 6 per cent per annum or 50 per cent of commercial rate of interest charged by banks, whichever is lower, as per scheme approved by CCEA in June, 2018.
The approval will help in improving liquidity of sugar mills by way of value addition to their revenues from supply of ethanol under Ethanol Blended Petrol Programme, reducing sugar inventories and thereby facilitate timely clearance of cane price dues of farmers and achieving 10 per cent blending target of EBP.