New Delhi, June 04: Pushed to the wall over millers' uncompromising attitude on payment of state advised price (SAP) of sugarcane in Uttar Pradesh, the Centre is considering a one time assistance of around Rs 500 crore to the state government to resolve the imbroglio. Official sources here said nothing has been finalised so far but options before the government are to either release the money from the Sugarcane Development Fund (SDF) for which an ordinance will have to be issued or to make allocation for it from the annual budget. Release of money from the fund is governed by the SDF Act.
Millers are not in favour of taking interest-free loans to pay the sap since they will have to eventually pay back the principal amount, so the Centre will have to assist the UP farmers on its own, they said.
SDF has been created by levying a Rs 140 a tonne cess on sugar at Millgate and at present has around Rs 1,300 crore in its kitty.
A final decision will be taken by Prime Minister Atal Bihari Vajpayee in consultation with Food Minister Sharad Yadav and Finance Minister Jaswant Singh, they said.
Once the "in principle" decision is taken, modalities will be worked out by the food ministry for the ways and means of disbursal of the package.
They said the required amount may eventually be released to the state which can pass it on to the cane growers through the district collectors or the cane cooperative societies.
The assistance is aimed at bridging the average Rs 12 a quintal gap between the actual cane price paid and the Rs 95 per quintal sap fixed by the state government to nil.
Bureau Report