Bihar bid to woo sugar mill investors

PATNA: Sugarcane industries minister Awadhesh Prasad Kushwaha on Monday assured sugar mill owners and sugarcane growers of the state government’s commitment to provide incentives to attract investments for production of sugar in the state. “Our state has abundant water which can be used to increase sugarcane yield,” he said and called upon investors to take advantage of the situation by setting up new sugar mills in the state.

Addressing India-International SugarCon, 2011, organized by the Indian Chamber of Commerce (ICC) in collaboration with the state sugarcane industries department, the minister said sugarcane production could be enhanced by using modern sugarcane farming technique. Bihar’s contribution to national sugarcane production was once 25%, which has come down to as low as 2%, he said and stressed the need to regain the old glory.

Sugarcane industries principal secretary C K Mishra said sugar mill owners would have to invest more in setting up sugar mills. “The government is ready with incentive schemes to support them,” he said.

Speaking on ‘Government policies and producers’ necessity’, Bihar and Uttar Pradesh Sugar Mills Association president C B Patodia said the future of sugar industries is in dark because its prices are controlled by the Central and state governments. “The mills can produce sugar but they cannot sell it without the Centre’s release order. Moreover, 10% of the produce has to be given for the public distribution shops at rates 40% less than the cost of production,” he said and added such an arrangement hits mills’ capacity to pay farmers.

ICC director general Rajeev Singh said also blamed it on low margin of profits. Speaking about the investment opportunities for sugarcane-based industries in the state, sugarcane industries commissioner Bimalanand Jha said the government gives subsidy up to Rs 10 crore for setting up greenfield sugar complex. This includes exemption from stamp duty, registration fees on purchase of land and purchase tax on sugarcane for five years from the date of commercial production of sugar. There is also 10% subsidy on capital investment up to Rs 3.5 crore for setting up distilleries/ethanol units. The government also provides 10% subsidy on capital investment up to a maximum of Rs 10 crore for setting up cogeneration units for production of power.

Source: Times of India

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