A decision is expected to be taken at a cabinet meet scheduled to be held tomorrow, sources said
Highlights
- Centre to announce Rs 8,000 crore bailout to help farmers, say sources
- Could ease some of the burden on farmers facing dues of Rs 22,000 crore
- Critics say move linked to recent BJP defeat in bypolls in UP
Concerned over mounting cane arrears to the tune of Rs 22,000 crore, the government is expected to announce a bailout package of over Rs 8,000 crore to clear dues of farmers, sources told NDTV.
The amount will include creation of buffer stock of 30 LMT (lakh metric tonne), for which the money will be transferred directly to farmers' bank accounts. The minimum price for sale of sugar will be fixed at around Rs 20 a kg. The package is also expected to include a scheme worth over Rs 4,400 crore for increasing the capacity for production of ethanol, one of the by-products of sugarcane.
A final decision is expected to be taken at a cabinet meeting scheduled to be held tomorrow, sources said.
Cane arrears is seen as the central issue that led to the BJP's loss in the recently concluded crucial by-elections in Kairana, Uttar Pradesh - the largest cane producing state in the country. The party, which held the Lok Sabha seat, lost it to Ajit Singh's Rashtriya Lok Dal, which was backed by the Congress, Samajwadi Party and Dalit powerhouse Mayawati.
The election was viewed as a test of unity for the opposition parties aiming at challenging the BJP in the 2019 national polls. That the BJP lost the election in Uttar Pradesh, which sends the largest number of lawmakers to Lok Sabha, was viewed as a matter of concern by a section of the party.
After the results were announced, Samajwadi Party leader Akhilesh Yadav said the Uttar Pradesh government has "repeatedly fooled the people". "Farmers were told that their loans were waived but instead they lost their lives," he said.
Last month, the Centre had announced a Rs 1,500-crore production-linked subsidy for sugarcane farmers to help millers pay cane payment.
The state's BJP government led by Yogi Adityanath said it was committed to paying cane dues within two weeks of purchase by the state's sugar mills. But ahead of the elections, many sugar mills put up closure notices. The mill association said the bumper crop was steadily eating into their profit margins.
Maximum cane dues -- more than Rs 12,000 crore -- are in Uttar Pradesh alone.