The West Indian Sugar Mills Association has written to the Food Minister, highlighting issues faced by several sugar mills due to the non-receipt of the Interest Subvention Scheme amount already claimed and pending disbursement from DFPD for almost two years.
“WISMA Member Sugar Mills also have been affected by the non-receipt of interest subvention amounts so far, and significant amounts are in arrears, which have impacted cash flow as banks have already recovered interest against the said subvention loan from sugar mills,” the letter mentioned.
The sugar industry has invested Rs. 40,000 crore in ethanol projects across India, with Maharashtra accounting for about 40% of the investment.
The letter also notes that, in view of the annual rise in sugarcane FRP over the last six years, and with the sugar MSP price remaining locked at Rs. 31 per kg since 2019, mills have been severely affected by cash shortages in FRP cane payments, which are delayed by 14 days after cane receipt.
The Maharashtra State FRP arrears have accumulated up to Rs. 5,000 crores. The letter states that the ethanol contribution, which has been about 20% and has been stripped, with an allocation of 25-30%, creates a further crisis.
