Govt bank turns down loan proposals of 7 sugar factories controlled by Mahayuti leaders

NCDC rejected ₹1,441 crore loan proposals for seven sugar factories linked to Mahayuti politicians due to financial irregularities and defaults.

MUMBAI: The National Cooperation Development Corporation (NCDC), which grants loans to cooperative sugar factories with a bank guarantee by the state government, has rejected funding proposals of ₹1,441 crore to seven sugar factories under the control of Mahayuti politicians.

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The leaders include the BJP’s Raosaheb Danve, Sangram Thopte and Basavraj Patil, former NCP MLA Ashok Pawar, and NCP leader and the late Ajit Pawar’s close aide Prithviraj Jachak. Some of these politicians, including Thopte and Patil, had reportedly quit the Congress and joined the BJP only after they were assured of funding to their factories.

The state government had moved a proposal to the NCDC for cheaper loans to upgrade and operate 14 sugar factories controlled by Mahayuti leaders and even the NCP (SP). While seven were turned down, the loan proposals of seven other factories, including those under the control of Mahayuti leaders such as Vinay Kore, NCP MLA Prakash Solanke and BJP leader Arun Lad, have been greenlighted.

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The government stands guarantor for the loans and repays them if the factories default. While rejecting the proposals of the seven factories, the NCDC pointed to their failure to fulfil strict conditions related to financial discipline laid down by the state government in recent times.

“The factories have defaulted on the Fair and Remunerative Price and dues to the state government, have been running at a loss for the last three years or have given out the factories on lease,” said an official from the cooperation department. “Some of them have a net worth that is much below the set benchmark or have indulged in financial irregularities.”

The official added that the proposals were cleared by the state cabinet before sending them to the NCDC. “A committee under the sugar commissioner and one headed at the state level by the cooperation minister had brought the lacunae to the notice of the government, but the proposals were nevertheless tabled before the cabinet. They were moved only out of political compulsions.”

According to officials from the cooperation department, the proposals have not been rejected per se but have been deferred. “The NCDC team visited the sugar factories after the state government proposed the loan of ₹2,200 crore,” said an official. “The NCDC has asked the state government to weed out the lacunae in the proposals and resubmit them. However, it is not possible for most of the factories to comply with the conditions.”

In the last three years, the Mahayuti government proposed loans of ₹5,200 crore to 32 sugar factories, most of them under the control of ruling party leaders. Barring 10, including the seven rejected recently, other proposals have been passed by the NCDC.

Revenue minister Chandrashekhar Bawankule said, “The loans to the sugar factories are given keeping the interest of farmers in mind.”