Maharashtra govt likely to give nod on sugar transport subsidy

New Delhi: Despite disapproval from the Uttar Pradesh sugar mills, the Maharashtra counterparts are optimistic that the State government will give a nod to its demand on granting mills a transport subsidy for sales of sugar outside its borders. Earlier in the week, it was reported that the President of Uttar Pradesh Sugar Mills Association, has written to the secretary, food and public distribution, criticising the subsidy move saying that such a step would provide an unfair advantage to Maharashtra.

Ajith Chougule, Executive Director, West Indian Sugar Mills Association (WISMA), explained Bizz Buzz on the need for transport subsidy for the sugar mills of Maharashtra. "The price difference between North Indian sugar mills and Central India or South Indian sugar mills is around Rs. 2-3 per kg. Because in Northern part, Uttar Pradesh produces mainly M-Grade of sugar, which are large crystal (sugar) products. Whereas Maharashtra produces S30 Grade. Minimum Selling Price (MSP) ordered by government of India is Rs. 31 per kg+ 5 per cent GST. So, when you get large crystals (M-Grade Sugar) at Rs. 31 per kg then naturally these merchants buy from North.

According to Chougule, since production of sugar in UP is up and larger crystal of sugar is being sold at the same price as other variants, the demand is more from sugar mills of UP. He also added that Maharashtra's S30 Grade doesn't find customers from North-East or East India.

"Maharashtra government is in favor of the decision and sugar Commissioner has sent in a proposal to the State government. So, now State government cabinet has to decide on this. We are hoping within this month a decision will be made on this," Chougule told Bizz Buzz.

The request for transport subsidy over sugar was made by the sugar mills from Maharashtra in January 2021. To meet these price difference, Maharashtra sugar mills have requested the government, in which All India Sugar Trade Association (AISTA) Chairman Praful Vithalani gave presentation to the Maharashtra Deputy Chief Minister and other council of ministers earlier in the month of April on the matter.

Although no clarity has been provided if such a subsidy will be given a nod, WISMA is optimistic that a subsidy of Rs2,000 per quintal would be the substantial and ideal for sugar mills of Maharashtra. According to Chougule, in case a sugar transport subsidy is approved, and mills can move one lakh tonnes of sugar with a subsidy of Rs1- 2 per kg, then there might be a revenue ease of Rs10 crore for the State sugar mills which can further be utilized for sugar payments.