Centre approves Rs 45-billion financial package for sugar industry for FY19

The government on Wednesday approved a Rs 45 billion package for the sugar industry that includes over two-fold jump in production assistance to cane growers and transport subsidy to mills for export up to 5 million tonnes in the marketing year 2018-19, sources said.

The Cabinet Committee on Economic Affairs (CCEA) approved the food ministry's proposal that seeks to address the surplus domestic stock of sugar and help mills in clearing huge cane arrears of around Rs 130 billion.

With assembly elections due in some states and upcoming general polls in mid-2019, the government wants to address cane growers payment issue.

This is the second financial package to bail out the sugar industry after Rs 85 billion in June. The industry is facing a glut-like situation because of record production of 32 million tonnes (MT) in the 2017-18 marketing year (October-September), resulting in a closing stock of 10 MT at the end of this month.