In a long-awaited relief for workers of the defunct Morena Division Cooperative Sugar Factory, the Madhya Pradesh Cabinet has approved a package to clear pending salaries.
The decision, made on August 19, 2025, represents a major effort to address longstanding financial issues at the Kailaras-based plant, which has been non-operational since the 2008–09 season. The funds, which will be disbursed via the MSME Department, will also settle payments owed to sugarcane farmers and other creditors.
Along with financial relief, the Cabinet has approved the complete liquidation of the factory and the transfer of its 22.34 hectares of land to the state government. This land will be allocated to the MSME Department to develop employment-generating industries in Morena district. The plant’s machinery and other assets will be sold through a transparent process managed by the Department of Public Asset Management.
According to the Jansampark Vibhag, Madhya Pradesh, an amount of approximately Rs. 61 crore will be provided through the MSME Department to settle dues of employees, farmers, and other liabilities. Plant and machinery will be sold through a transparent process by the Department of Public Asset Management.
Originally, the state intended to build an MSME complex on the site. However, local farmers have pushed for the sugar mill’s revival instead. Urban Development Minister Kailash Vijayvargiya stated on Tuesday that the government remains open to both options. He noted, however, that many farmers have stopped cultivating sugarcane, vital for the mill’s operation. If sugarcane farming is resumed, the government may reconsider restarting the mill. Otherwise, the focus will shift to attracting investors for the proposed MSME hub.
The Kailaras sugar mill, registered in 1965 and operational from the 1971–72 season with a crushing capacity of 1,250 tonnes per day, has remained closed since 2008–09.
The decision comes amid growing concerns over the sustainability of cooperative sugar mills in Madhya Pradesh.
