The Ministry of Cooperation on March 19, 2025, notified regarding the Strengthening of the Cooperative Sugar Mills.
The government of India has taken the following steps to strengthen of Cooperative Sugar Mills (CSMs):-
Relief from Income Tax to Cooperative Sugar Mills: Sugar factories operating in the co-operative sector in certain States of India pay to sugarcane growers a final amount, often referred to as Final Cane Price (FCP) which is over and above the Statutory Minimum Price (SMP) fixed by the Central Government under the Sugarcane Control Order, 1996.
Rs 10,000 crore loan scheme through NCDC for strengthening of Cooperative Sugar Mills: Ministry of Cooperation has launched a new scheme named 'Grant-in-aid to NCDC for Strengthening of Cooperative Sugar Mills', under which Government of India has provided grant of Rs.1,000 crore to NCDC during financial year 2022-23 and 2024-25. NCDC will use this grant to provide loans up to Rs. 10,000 crores to Cooperative Sugar Mills, for setting up ethanol plants or for setting up cogeneration plants or for working capital or for all three purposes. NCDC has so far sanctioned 87 loans of ₹ 9893.12 crore to 48 CSMs.
Preference in purchase of ethanol to Cooperative Sugar Mills: Oil Marketing Companies (OMCs) are according top priority to CSMs participating in ethanol procurement cycles. So far, 24,650 KL ethanol worth ₹ 25.50 crore have been procured by OMCs from 11 CSMs.
Enhancing ethanol production of Cooperative Sugar Mills by converting their molasses-based ethanol plants into multi feed ethanol plants: Ministry of Cooperation has taken initiative for conversion of existing molasses-based ethanol plants of CSMs into multi feed ethanol plants. As that they can operate their distilleries throughout the year, under this initiative CSMs will get following benefits:
• NCDC will provide a term loan under funding pattern of 90:10, with 90% from the society and 10% from NCDC.
• On March 6, 2025, the Department of Food and Public Distribution issued a Gazette Notification notifying the revised scheme titled "Scheme for Financial Assistance to Cooperative Sugar Mills (CSMs) for Converting Their Existing Sugarcane-Based Feedstock Ethanol Plants into Multi-Feedstock-Based Plants to Utilize Grains Such as Maize and Damaged Food Grains (DFG) for Enhancing and Augmenting Ethanol Production Capacity”, exclusively for cooperative sugar mills. Under the scheme, Central Government will bear the interest subvention on the loan availed by them at a rate of either 6% per annum or 50% of the interest rate charged by the lending institution, whichever is lower, for a period of five years, including a one-year moratorium.
[Release ID: 2112725]
