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dairy-entrepreneurship-development-scheme

Scheme for Extending Financial Assistance to Sugar Mills for Enhancement and Augmentation of Ethanol Production Capacity

a. Financial Assistance to Sugar Mills for Augmentation of Ethanol Production Capacity.

With a view to increase production of ethanol and its supply under Ethanol Blended with Petrol (EBP) Programme, especially in the surplus season and thereby to improve the liquidity position of the sugar mills, enabling them to clear cane price arrears of the farmers, the Central Government has notified the following schemes:

  • (i) Scheme for extending Financial Assistance to Sugar Mills for Enhancement and Augmentation of Ethanol Production Capacity-2018-19
  • (ii) Schemes for extending Financial Assistance to Sugar mills & Molasses Based standalone distilleries for enhancement .and augmentation of ethanol production capacity – 2018-19
  • (iii) Scheme for extending financial assistance to project proponents for enhancement of their ethanol distillation capacity or to set up distilleries for producing 1st Generation (1G) ethanol from feed stocks such as cereals (rice, wheat, barley, corn & sorghum), sugarcane, sugar beet, etc. – 2021

Department of Food and Public Distribution, Ministry of Consumer Affairs and Food & Public Distribution is the nodal Department for the above mentioned Schemes. NABARD has been appointed as the Nodal Agency for channelizing interest subvention under these flagship programme.

Interest Subvention @ 6% per annum or 50% of the rate of interest, whichever is lower, on the loans to be extended by the Financial Institutions shall be borne by the Government of India for five years only, including one year moratorium period.

As on date, DFPD has accorded in-principle approval to 1141 Sugar mills out of which NABARD has received claims of 200 sugar mills/distilleries out of which claims amounting Rs.713.09 Cr. has already been released.

The cumulative position of interest subvention released as at the end of each year since inception, is given in table:

Year No. of units (In Quarters) Interest subvention released (Rs.cr.)
2020-21 194 65.9
2021-22 315 132.39
2022-23 743 240.35
2023-24* 502 264.45
Total 1754 713.09

Data as on 13 December 2023

Cumulative Data:

As on date Total Sugar Mill 200
Total Fund Released Rs.713.09 Cr
As on Date 13 December 2023

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b. Sugar Soft Loan Scheme 2018-19

The Government of India introduced the scheme of soft loans to sugar mills to facilitate payment of cane dues of farmers for the sugar season 2018-19. NABARD is the nodal agency for implementing the interest subvention under the scheme. Under the scheme, interest subvention is available for a maximum period of one year at 7% simple interest or at the actual rate charged by banks (whichever is lower) on loans sanctioned by them to sugar mills for clearing the cane due arrears of farmers. All the loans which were sanctioned by 31-07-2019 and disbursed by 31-08-2019 by the lending banks were eligible for interest subvention. As on date, an amount of Rs.517.87 Crore was released to lending banks as interest subvention under the scheme.

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