One-time settlement for sugar co-ops: Pawar | mumbai | Hindustan Times
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One-time settlement for sugar co-ops: Pawar

mumbai Updated: Sep 21, 2010 02:47 IST
HT Correspondent
HT Correspondent
Hindustan Times
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Union Agriculture Minister Sharad Pawar, also known as the undisputed leader of the sugar co-operatives in the state, is keen on working out a one-time settlement to wipe out past dues and outstanding government guarantees to these mills.

Pawar held a review meeting along with Chief Minister Ashok Chavan to discuss this issue with the Maharashtra State Co-operative Bank, National Bank BARD, state co-operative and finance officials.

There are about 130 working sugar co-operatives in the state. Their outstanding dues to the apex district co-operative bank, through government guarantees, in terms of medium term loans stands are around Rs 2,000 crore.

“No decision was taken. The meeting was to take a review of the sugar co-operatives. We discussed the possibility of a one-time settlement but its framework has not yet been decided,” said co-operatives minister Harshawardhan Patil.

One-time settlement refers to the closure of outstanding loans by granting certain concessions to the debtor by offering a waiver on the entire or marginal interest or other financial incentives for paying off the principal amount.

Pawar had introduced the OTS scheme recently for farmers, who did not benefit from the loan waiver scheme initially aimed at the cotton distressed areas. In this scheme, farmers who had overdue loans until 2007 were offered 25 per cent rebate if they paid the remaining 75 per cent on time.

“NABARD permission will have to be taken to offer OTS to sugar co-operatives. So far, this has not been worked out. It seems difficult,” said a senior official present at the meeting.

The state has repeatedly bailed out sugar co-operatives in the state. The sugar lobby has a political clout in the state with a majority of the mills being controlled by the ruling alliance politicians. A recent CAG report of 2007 on sugar co-operatives had highlighted the irregularities and mismanagements of these units.