`147-cr loan guarantee to state’s sugar mills | mumbai | Hindustan Times
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`147-cr loan guarantee to state’s sugar mills

Despite opposition, a few powerful Congress and Nationalist Congress Party (NCP) ministers managed to get the guarantee approved for Rs147-crore loan for 18 sugar factories from the state-controlled cooperative banks.

mumbai Updated: Aug 25, 2011 00:58 IST
HT Correspondent

Despite opposition, a few powerful Congress and Nationalist Congress Party (NCP) ministers managed to get the guarantee approved for Rs147-crore loan for 18 sugar factories from the state-controlled cooperative banks.

The cabinet on Wednesday took a decision in this regard even as ministers from Mumbai and Vidarbha resisted the move. The guarantee will go for pre-seasonal loans, mid-term debt and the interest thereof.

The 18 factories are associated either with Congress or NCP leaders — the most prominent being state NCP chief Madhukar Pichad and agriculture minister Radhakrishna Vikhe Patil (Congress).

The sugar mills that will benefit include Appa Nalavade, Sant Damaji, Swami Samarth (Solapur), Agasti (Ahmednagar), Vasant Naik (Pusad), Vikhe Patil (Pravara), among others.

The troubled Maharashtra State Cooperative Bank (MSC Bank) will finance eight factories. The remaining will get loans from their respective district cooperative banks.

In May, the Reserve Bank of India brought the MSC Bank under administrative rules for financial irregularities and negative worth. The bank is fighting a case in the Supreme Court for restoring loan guarantees of Rs1,771 crore that the state government had extended to sugar factories and weaving mills.

Finance minister Ajit Pawar claimed that the sugar factories needed impetus to keep going. He said five of the 25 factories that were considered for guarantee were rejected because they did not meet the criteria.

A government press release said: “The factories that don’t have sugarcane availability and have negative worth will not be given the guarantee.”