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Food Ministry has worked out a package for restructuring of sugar factories which have term loans outstanding as on March 31, 2005 and which are commercially viable. According to the package, NABARD will provide a sum of Rs. 500 crore as liquidity support to cooperative banks. For the purpose of providing loans sugar mills in the country have been categorized into those which are required to repay the term loan with in a period of 5 years and those which could repay within a period of 15 years. There are 47 sugar factories in the 1st caretegory and 92 in the second according to the NABARD package prepared for this purpose. A moratorium of 2 years will be allowed in both the cases. This was announced here today by Shri Sharad Pawar, Minister of Agriculture, Consumer Affairs, Food and Public Distribution while addressing media persons. The package will benefit about 270 cooperative sugar factories and the total term loans thus restructured amounted to Rs. 2500 crore.
According to the package proposed by NABARD, the rate of interest in the restructured loans will be brought down to 10 per cent per annum with effect from April 1, 2005 irrespective of the original contractual rate. The amount to be provided by the government of India for interest subvention of the restructuring of loans is estimated at Rs. 525 crore. NABARD has already initiated the process of making available to sugar factories the benefit of the package by October 15, 2005.
Total payment for sugar cane in the season upto May this year was about Rs. 12144 and the outstanding arrears at present is Rs. 77 crore, the minister pointed out.
There are 553 sugar factories in 18 states out of which 55 per cent are in cooperative sector. NABARD has analysed the condition of 170 factories for preparing the package.
SBK:CP:sugarpackage13.9
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