CCEA approves new formula to pay production subsidy to sugar mills
The Cabinet Committee on Economic Affairs (CCEA) has approved a new formula to calculate production subsidy to sugar mills for the ongoing 2015-16 season after taking into account lower sugar production and exports. To address liquidity stress in the sugar industry and facilitate timely payment of cane arrears, the Centre last year had announced a subsidy of Rs 4.50 per quintal of cane crushed during October 2015-September 2016 season. The condition set was that mills meet the export quota of four million tonnes and ethanol blending target. The subsidy scheme has now been discontinued and the government is yet to make payments to mills.
So in a view of drought in parts of Maharashtra and Karnataka, the CCEA has approved the revised formula to determine the production subsidy. The production subsidy was initially calculated based on the estimated cane crushing of 255 million tonnes in the 2015-16. But the cane crushing has come down due to drought. Consequently, sugar output is also estimated to be lower at 25.2 million tonnes this season.
So let's discuss some questions related to this post:
1. The CCEA has approved a new formula to pay production subsidy of which segment?