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With nearly 30 per cent of India's cooperative and public sector sugar mills remaining non-operational, various state governments are finding ways to lease them to private players for revival
Photo Credit : Bloomberg
Instead of taking the onus of reviving the non-operational co-operative/state-backed sugar mills in the country totaling 202 mills, various state governments are in the process of transferring them to private companies. The only exception being Maharashtra and Uttarakhand housing a total of 45 non-operational co-operative/state-backed sugar mills that will be revived by the respective state governments. Uttarakhand, as per data, has a total of 10 sugar mills with only 3 being non-operational. Out of these 3, the state government is planning to operationalize one of them, the data sourced by the ministry of consumer affairs, food, and public distribution from various state governments, shows. This data was recently tabled in Parliament.
One of the major producers of sugar, the onus of revival of state-backed/cooperative sugar factories rest of the respective state governments.
As per the data, the Maharashtra State government has passed a resolution and framed criteria to rejuvenate non-operational sugar mills and their allied units on hire, partnership, or collaboration basis, many other state governments have shifted the onus of running their closed sugar mills to private or public sector operators. And this is because Maharashtra houses a total of 224 sugar mills out of 695, the maximum for any state. Of these, only 42 are non-operational.
"The Central government does not set up new sugar mills in any state of the country. The sugar industry has been de-licensed with effect from 11 September 1998. After de-licensing, the entrepreneurs are free to set up new sugar mills in any part of the country subject to fulfilling the conditions laid down in the Sugarcane (Control) Order, 1966," the ministry said in its written reply when asked to explain the "steps taken by the Government to set up new sugar mills in the country, State-wise?"
Uttar Pradesh is the next state after Maharashtra to host the second largest number of sugar mills in India - 157 - of which only 37 are non-operational currently. There is no data that shown what steps have been taken by the UP Government to operationalize non-operational sugar mills.
From UP, let’s take the case of Bihar where 18 out of 28 sugar mills are non-operational. The Bihar State Government, as per the data, is said to have taken a policy decision to revive the sick sugar mills of the Bihar State Sugar Corporation by "transferring them to private/public sector entrepreneurs" on long term lease through bid process management, the Ministry of Consumer Affairs, Food, and Public Distribution informed the Parliament in a written response recently. "Out of the 15 closed sugar mills, 8 closed units have been transferred to Bihar Industrial Development Authority for establishing priority sector industries. Out of the remaining seven closed mills, two sugar mills namely Lauriya (West Champaran) and Sugauli (East Champaran) have been reconstructed and revived by HPGL Biofuel Ltd. and they have become operational. The bidding process of the other 5 sugar mills namely Bihta, Motipur, Raiyam, Samastipur and Sakri have also been completed," the statement said.
The situation in southern states is not very different.
In Karnataka, where there are a total of 87 sugar mills of which 22 are non-operational, the state government has given out 8 cooperative sugar factories to private entrepreneurs on a long-term lease. "ln the interest of sugarcane farmers and employees of sugar factories, Government of Karnataka has taken a decision to lease out the sick cooperative sugar factories to private entrepreneurs on a long-term lease. Eight cooperative sugar factories have been leased out to private entrepreneurs so far. One sugar factory of public sector and two of the cooperative sectors have also been proposed for lease, and the lease process is under progress," the response listed against Karnataka stated.
For the state of Andhra Pradesh where 21 out of 29 sugar mills are non-operational, a Group of Ministers (GoM) has been formed but only for the Cooperative Sugar Mills. "The GoM is visiting the cooperative sugar mills to study the ground level constrains of the mills to suggest alternate remedies," the ministry said.
For the state of Gujarat, the data is available on only one non-operational sugar mill where the state government is said to have sanctioned some amount to pay sugarcane arrears to the farmers to survive. There are a total of 21 sugar mills of which 6 are non-operational. "ln the current financial year 2O2O-21 the State Government of Gujarat has sanctioned liquidity support loan for Rs 25 Crore to Vadodara District Cooperative Sugarcane Growers Union, to pay sugarcane arrears to the farmers to survive this non-operational sugar mill," it said.