Government Launches Support Scheme for Cooperative Sugar Mills
The Ministry of Cooperation has introduced a new initiative aimed at easing the operational and financial challenges faced by Cooperative Sugar Mills (CSMs). Titled the “Central Sector Scheme-Grant-in-aid to NCDC for strengthening of Cooperative Sugar Mills,” this scheme is designed to revitalize the sugar industry and ensure the sustainability of these vital establishments.
As part of an extensive evaluation of the scheme, it was discovered that out of 312 cooperative sugar mills, 102 are currently non-functional. In light of these findings, the Ministry, in collaboration with relevant state authorities, is actively working to restore operations at viable mills.
Financial Overview and Disbursement
To facilitate the recovery of the sector, the Central Government allocated ₹1,000 crore to the National Cooperative Development Corporation (NCDC). This grant enables NCDC to extend loans totaling ₹10,000 crore to cooperative sugar mills, effectively leveraging the financial support provided. To date, NCDC has successfully disbursed ₹10,005 crore to CSMs under this initiative.
Of the funds allocated, ₹251.40 crore has been designated for ethanol production facilities, while ₹97.12 crore has gone towards co-generation power projects. The vast majority—₹9,656.90 crore—has been directed to meet working capital needs across 56 cooperative sugar mills that are reaping the benefits of this scheme.
Impact and Accessibility
A third-party assessment of the scheme highlighted a significant advantage: the NCDC’s financial support features lower interest rates compared to other lenders. This not only sets a new standard for banks and financial institutions but also enhances transparency and accessibility for cooperative sugar mills seeking funding. As a result, there has been a notable reduction in outstanding cane bills, signaling improved business performance and timely payments to farmers and workers.
It is important to note that the scheme does not include any interest subvention component. The NCDC, acting as the nodal implementation agency, has established comprehensive guidelines for loan recovery, which are closely monitored by its Board of Management.
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