UP sugarcane arrears breach Rs 6,000 crore mark

Even as the Yogi Adityanath government in Uttar Pradesh has virtually put the state private sugar millers on notice to clear farmers’ cane dues, the arrears pertaining to the current 2016-17 crushing season are over Rs 6,000 crore.

However, since the mills have been provided a statutory window to settle their cane payments within 14 days of the purchase of the cash crop, the payables are a little under Rs 4,300 crore pertaining to the crushing season underway.
On March 23, Chief Minister Adityanath had asked state mills to settle arrears within a month, while reviewing the payments situation with UP's chief secretary, cane commissioner and other senior officials, and warned of strict action against the defaulting units.
In its 2017 UP election manifesto, the ruling Bharatiya Janata Party (BJP) had promised to ensure cane farmers' payments within the stipulated 14 days after purchasing cane at the factory gate. On March 23, arrears of about Rs 4,160 crore were pending on mills, which have now increased to over Rs 4,280 crore, according to the latest available data.
The crushing season is likely to continue till the last week of April. Thirty-eight of the 116 operational mills have closed down following the conclusion of their crushing operations.
Considering the current dispensation’s adherence to its other promises such as the closure of illegal slaughterhouses, forming anti-Romeo squads and checking public exchequer extravagance, the government is likely to act tough against defaulting mills.
An FIR has been lodged against a Bajaj Hindusthan-owned sugar mill in Muzaffarnagar district. The case was lodged under the Essential Commodities Act, among others, for allegedly diverting funds meant for settling farmers’ arrears to other businesses.
Cases under the Essential Commodities Act could be filed only after apprising the district magistrate (DM) concerned. The case has been filed against the mill promoter and the occupiers.
A Muzaffarnagar district cane official said the mill had diverted about Rs 8 crore, which was supposed to be paid towards settling farmers’ dues, to other heads when the case was lodged on March 20.
Meanwhile, a senior cane department official told Business Standard the case was filed before the state government’s directive to mills.
“Since the mills have been given time until April 24 to clear the arrears, any action would now be taken in the light of the payment status by that date,” he added.
Bajaj Hindusthan Sugar said in a statement that “there has been no diversion of funds … We have interest and capital repayments of bank loans, for wages, packing materials, transportation, etc. All are necessary expenses for running the sugar factory.”
In the current crushing season, the cane payables have touched Rs 23,000 crore and by the end of the crushing season, this amount is likely to be almost Rs 26,000 crore, compared to a little over Rs 18,000 crore for the 2015-16 season. 

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