The Cabinet approves the provision of additional funds for sugar mills and allocates additional funds of Rs 2,790 crore to augment ethanol production.
The news brings in negative sentiment for the sugar industry as the expectations were to receive soft loans of Rs 15,000 crore with a subsidy of Rs 3,355 crore on loans to sugar mills.
Shares of Balrampur Chini Mills fell 2 percent on BSE. Dhampur Sugar Mills and Avadh Sugar declined nearly 3 percent. Dalmia Bharat Sugar was down 4 percent
Recently on February 14, the government hiked the minimum selling price (MSP) by Rs 2 per kg to Rs 31. The move was to bring in liquidity of cash-strapped millers and help clear mounting cane arrears of around Rs 20,000 crore.
Last year, on September 27, 2018, the cabinet approved a Rs 5,538 crore package to deal with the excess sugar production to boost exports and help clearing dues of cane growers. All these efforts by the government are to improve the liquidity to clear the dues.
First Published: IST