Expedite debt restructuring package for sugar mills: Edappadi K Palaniswami

CHENNAI: Taking into account the need to protect the livelihood of nearly 4 lakh sugarcane farmers in Tamil Nadu, Chief Minister Edappadi K. Palaniswami has called upon the Centre to restructure the loans extended to the sugar industry and sought a directive to the lending institutions to finalise a debt restructuring package besides sanctioning additional sugar to the mills across Tamil Nadu.

Listing out the steps required for the revival of Tamil Nadu Sugar Industry Mr. Palaniswami said the loans provided to them should be restructured. The banks and Financial Institutions may be instructed to finalise the debt restructuring package soon. “Until steps are finalised to revive the sugar sector, banks / financial institutions may kindly be advised not to take any harsh measures under the Insolvency and Bankruptcy Code or the SARFAESI Act or refer cases to the DRTs,” the CM said.

 In a letter to Union finance minister Nirmala Sitharaman he said, as a special measure to improve the financial liquidity of the sugar mills, the Centre should sanction additional sugar release to the mills in the state. Besides, banks may be advised to release loans to farmers for cultivating sugarcane, even if the earlier loans have not been repaid by them. This non-repayment of loans is due to the non-payment of FRP dues by the sugar mills, the CM added.

He further said, “in order to protect the livelihood of nearly 4 lakh farmers of Tamil Nadu, I request your continued support and favourable orders from the government of India for reviving the Tamil Nadu sugar industry.”

Recalling the finance minister’s ‘Interactive Meeting on Sugar Industry’ at Chennai on Sept. 10, Mr Palaniswami said this has increased the level of confidence amongst the stakeholders. This was followed up with a high level meeting of officials and representatives from Sugarcane Growers’ Associations on Sept. 24 in Chennai, and a Special SLBC Meeting on debt restructuring of the Mills on Sept. 30, here. It has been decided to constitute a ‘Sugar Mills Revival Committee’ with members from Government of Tamil Nadu and the Banks to evolve a mechanism for restructuring the loans owed by the sugar mills to banks.

For its part, the state government has taken numerous measures to improve the financial status of the sugar industry and these include: providing Transitional Production Incentive at Rs.200 per MT of cane, over and above FRP, amounting to Rs 134.53 crore to 1,44,882 farmers for the cane crushed during season 2017-18, besides announcing Rs 200 crore as Transitional Production Incentive at Rs 137.50 per MT of cane, over and above FRP, for the cane crushed during the season 2018-19.

Apart from taking steps to improve the cane area under drip irrigation to about 34,000 Ha in 2019-20 planting season, the state government will be providing additional subsidy of Rs 68.35 crore, over and above the funds provided under NADP scheme. Due to the active steps taken by the state government and normal rainfall forecast for 2019, planting of cane during 2019-20 season is expected to increase, facilitating the Mills to improve their capacity utilisation.