The Punjab government has decided to seal all seven private sugar mills owned by politically connected industrialists till they release Rs 223 crore which they owe to the government and sugarcane growers.
Acting on the government’s directions, the Hoshiarpur administration on Tuesday night sealed the premises of AB Sugars Limited and Indian Sucrose Limited in the district.
While AB Sugars belongs to the family of late liquor baron Ponty Chadha, Indian Sucrose is owned by Uttar Pradesh strongman DP Yadav.
Punjab Markfed chairman Jarnail Singh Wahid owns a sugar mill in Phagwara and Rana Sugar Mills (Amritsar) belongs to Congress MLA Rana Gurjeet Singh.
The SAD-BJP government decided to crack the whip after Monday’s cabinet meeting in which the issue of recovery from private sugar mills was hotly discussed.
While approving the agriculture department’s proposal to recover Rs 223 crore from these mills as outstanding payment to sugarcane farmers, the cabinet had directed to take action against the erring millers.
The state government had released Rs 111 crore subsidy to the millers. The Cabinet also decided to contribute Rs 112 crore as a stopgap arrangement.
At the root of government’s tough stance is an agreement/understanding between private sugar mills and the government.
The government had fixed Rs 295 per quintal the rate of cane crushing to be paid to farmers. While the government had to pay Rs 50 per quintal as subsidy — 2015-16 season only —the mill owners had to pay Rs 245 per quintal for this crushing season.
Sources say the government had decided to pay Rs 50 subsidy if the market sugar price was Rs 2,600 per quintal or less. It was decided that if sugar price was Rs 3,000 per quintal or more the government will not pay Rs 50 per quintal subsidy and the millers will have to pay the fixed Rs 295 per quintal to the farmers.
“The sugar price in the market has been more than Rs 3,000 per quintal during the crushing season in question. This is why the government is asking millers to pay Rs 295 per quintal to the farmers and return the subsidy money to the government,” a cabinet minister, requesting anonymity, said.
The government had already released Rs 111 crore to millers — 50% of the total Rs 50 subsidy — and decided to contribute Rs 112 crore as a stopgap arrangement.
“The millers owe the government Rs 223 crore. This includes the Rs 50 per quintal subsidy that the government paid and now wants to recover as the sugar price has been very high. These mills have earned over Rs 500 crore profit during the crushing season and are now refusing to pay the total money they owe to the farmers,” the minister said.
The government had directed the district collectors concerned to issue recovery certificates to all the seven mills a few days ago following reports of unrest among farmers who had adopted a tough stance on the outstanding amount.
The collectors were directed to recover the amount as “arrears of land revenue” under the Revenue Recovery Act, 1890.
The mill owners were insisting that the extra promised amount of Rs 50 be paid by the state government itself.
At least Rs 20.5 crore is reportedly outstanding against the Mukerian mill and Dasuya sugar mill owes Rs 17 crore. The administration has attached the immovable assets and taken the entire stock of sugar and molasses into possession.
The millers say the continuous losses have eroded the financial health of their mills and the government should pay the subsidy as promised.
Nearly 70% of the sugarcane grown in the state is crushed by the private millers.
Excise sleuths ask Dasuya mill to furnish biz details
A team from excise and sales tax department, Chandigarh, led by assistant excise and taxation commissioner Jaskaran Brar inspected the distillery of AB Sugars Limited in Dasuya and asked the management to furnish details of their business. “We have summoned them to Chandigarh with documents on October 3,” Brar said.
The private mills
Rana Sugar Mills (Amritsar)
Bhagwanpura Sugar Mills (Dhuri)
Wahid Sandhar Sugars Limited (Phagwara)
Nahar Industrial Enterprises Limited (Amloh)
Chadha Sugars and Industries Limited (Gurdaspur)
AB Sugars Ltd, Dasuya (Hoshiarpur)
Indian Sucrose Limited (Hoshiarpur)