State approves ₹675-crore loan guarantees for sugar factories controlled by Mahayuti politicians

Maharashtra govt approves loan guarantees of around ₹675 crore for sugar mills related to politicians ahead of state assembly elections

MUMBAI: In the run-up to the state assembly elections, the Maharashtra government seems to have become quite generous. After announcing sops and schemes worth around ₹90,000 crore, the state has approved loan guarantees of around ₹675 crore for five sugar mills related to politicians who are either from the ruling parties or are likely to join them ahead of the polls.

File photo of Malegaon sugar co-operative in Baramati in Maharashtra. (Satish Bate/HT photo)

A loan guarantee means that the state government will have to pay the loan amount if the sugar factories fail to repay it.

“The state government has recommended approving a loan worth ₹674.84 crore to five sugar mills under ‘Margin Money Assistance’, a scheme run by the National Cooperative Development Corporation (NCDC),” states an order issued by the state cooperation department recently. Under the scheme, the loan amount will be routed through the state government.

The order states that the factories are not in a position to start operations without any assistance from the government or any other institution. ‘There is adequate availability of the sugarcane operation area of the factory however there is a grave need to fill the working capital gap. Operationalization of this factor will greatly help the cane growers in its area of operation,’ (sic) it states further.

On the list is Abhijit Patil, who left the NCP (SP) and joined the BJP before the Lok Sabha elections. The state government has approved a loan guarantee of ₹347.67 crore for his sugar factory—Vitthal Sahakari Sakhar Karkhana—in Pandharpur in Solapur district. The factory had defaulted on a loan amounting to a staggering ₹430 crore, after which the Maharashtra State Cooperative (MSC) Bank seized sugar stock of 1 lakh gunny bags in April.

The Vaibhav Nayakawadi-controlled ‘Hutatma Kisan Ahir Sahakari Sakhar Karkhana’ has got a loan guarantee of ₹148.90 crore. The sugar factory is situated in Sangli, and Nayakawadi is said to have helped the ruling Mahayuti coalition in the recently held Lok Sabha elections. He is the son of Dr Nagnathanna Nayakawadi, a freedom fighter and educationist, and has a significant hold over the district.

Another beneficiary is ‘Ashok Sahakari Sakhar Karkhana’, controlled by Bhanudas Murkute, a former MLA from Ahmednagar district who is likely to join the NCP. The sugar factory has received a loan guarantee of ₹90.30 crore. Murkute was considered close to NCP (SP) president Sharad Pawar. Last year, he joined the K Chandrashekar Rao-led Bharat Rashtra Samithi (BRS).

NCP (SP) MLA Mansinh Naik who controls a sugar factory in Sangli called ‘Vishwasrao Naik Sahakari Sakhar Karkhana’ which has also received a loan guarantee of ₹65 crore. After the split in the NCP, Naik remained loyal to the Sharad Pawar faction but the order indicates that he is likely to shift sides. Although Naik was not available for comment, an NCP insider confirmed his departure from the NCP (SP). “We were working on getting two MLAs from the rival faction (NCP-SP) and succeeded in getting one. The likelihood of the other MLA joining will also be clear soon,” the NCP leader said.

The last name in the list is the Shetkari Cooperative Sahakari Sakhar Karkhana. It has received a loan guarantee of ₹22.97 crore. Situated in Latur, it is controlled by BJP MLA Abhimanyu Pawar, a close aide of deputy chief minister Devendra Fadnavis.

The state government has further requested the NCDC to reduce the rate of interest. “The interest rate offered by NCDC is 9.81%, which is very high. It is requested that the said rate should be reduced from the current rate of interest and to be kept floating in nature,” (sic) the order adds.