Cabinet nod for state guarantee for loans for Pankaja Munde’s sugar factory

The state cabinet on Wednesday gave its nod for a state guarantee for margin money loans for working capital to four sugar factories, of which two are controlled

The state cabinet on Wednesday gave its nod for a state guarantee for margin money loans for working capital to four sugar factories, of which two are controlled by politically-influential leaders.

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Of the four factories, one is the Vaidyanath Cooperative Sugar Factory, which is managed by rural development minister Pankaja Munde, while the other is Tatyasaheb Kore Warana Sahakari Sakhar Karkhana led by former state minister Vinay Kore, whose political outfit is believed to be close to the ruling BJP.

The state stands the guarantee for the loan given to the sugar factories by the National Cooperative Development Corporation for upgradation of the utility and expansion. Dozens of sugar factories have applied for the state guarantee as most of them are in poor financial conditions.

“This [factories headed by political leaders getting state guarantee for loans] has happened even in the governments led by the Congress and NCP. The repayment ratio of the factories that were given guarantee has been very bad and the government ends up paying the interest and penalty,” said an official from the co-operation department.

Though the guarantee has been approved by the state cabinet, the factories will have to comply with the conditions of positive net worth and should not have non-performing assets.

The official said that these conditions are difficult to comply with. The proposal for state guarantee for loans will now go to a high-level committee headed by the co-operation minister of scrutiny.