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With the Cabinet’s approval on more financial assistance, sugar stocks took precipitating moves. The Cabinet waved a green flag for funds amounting to interest subvention for extending indicative loan amount by banks to the sugar mills. These funds would assist in improving the liquidity of sugar mills by way of value addition to their revenues from the 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 percent blending target of EBP.
KM Sugar Mills, Sakthi Sugars, EID Parry, Rana Sugars, Andhra Sugar and Shree Renuka Sugars were the top gainers with a rally of to 2 to 5 percent whereas Avadh Sugars, Dhampur Sugar, Dalmia Sugar, Dwarikesh Sugar & Triveni Eng. witness a sharp slide of 3 to 6%.
Union Finance Minister Arun Jaitley while addressing a press conference said that, “The Cabinet has given its approval for funds amounting to Rs 2,790 crore towards interest subvention for extending indicative loan amount of ₹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 ₹1332 crore already approved by the Cabinet Committee on Economic Affairs in June 2018.”
“The CCEA has approved ₹565 crore towards interest subvention for extending indicative loan amount of ₹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” he further added.
A separate scheme for the molasses-based standalone distilleries would be formulated accordingly by the Department of Food and Public Distribution. Both the interest subvention would be payable at 6 percent per annum or 50 percent of the commercial rate of interest charged by banks, whichever is lower, as per scheme approved by CCEA in June 2018.
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