Maharashtra cabinet approves guarantee of 37 cooperative sugar factories with negative net worth

Bombay: Despite a cash shortage, the Maharashtra cabinet chaired by CM Uddhav Thackeray on Tuesday decided to provide collateral for the principal amount of the loan and interest to nearly 37 cooperative sugar factories whose net worth has eroded and suffered from huge losses. The state cabinet, however, has placed a condition that these factories will have to start crashing and not remain closed despite the benefit of government aid. CM, CM MP Ajit Pawar and Senior Ministers Balasaheb Thorat and Jayant Patil will review the progress made by these factories and if they do not use the loan to operate during the grinding season, the government will take tough action against them.

As the Free Press Journal reports, these cooperative factories have been denied pre-seasonal loans by banks because their non-performing assets are quite high. However, these factories had made a statement to the government that without collateral they would not even get a loan to increase working capital. They had also argued with negative net worth and precarious finances that they had not been able to participate in the ensuing grinding season, which is set to begin on October 15.

The senior minister told the Free Press Journal: “The cooperative department argued that government guarantee for principal and interest is required because these 37 factories would need to get the pre-seasonal loans to participate in the next grinding season. . Their participation is important as Maharashtra will have a bumper sugarcane harvest of 9oo lakh tonnes during the 2020-21 grinding season compared to 752 lakh tonnes in 2019-20. In order to complete the crushing of the whole cane, the participation of more sugar factories, both cooperative and private, is necessary. .

The minister said the Cabinet had not agreed to guarantee that in his absence the standing cane harvest would have to receive compensation of up to a few thousand crore rupees.

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Posted on: Wednesday September 23rd 2020, 05:59 IST

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