With the National Democratic Alliance (NDA), led by Prime Minister Narendra Modi, securing a third term at the Centre in the recently concluded 2024 Lok Sabha elections, all eyes are now on the upcoming Union Budget 2024, slated to be tabled in the Lower House of Parliament in July.
The sugar industry has several expectations from the union budget to address its financial challenges. Here are some key demands like, Higher Procurement Prices for Ethanol, Minimum Selling Price of Sugar (MSP) Alignment, Consolidated Farming at Village Level, Incentivised Power Co-Generation, Support for Sugar Cane Harvesters, Drip Irrigation Subsidy, Long-Term Sugar Import-Export and Ethanol Production Policies, Loan Restructuring, Interest Subvention Scheme, Priority Sector Status etc.
1) Higher Procurement Prices for Ethanol: The industry seeks an increase in the procurement price for ethanol produced from Sugar/cane juice/Syrup/B Heavy Molasses and C Heavy Molasses. In future Ethanol prices will be revised simultaneously with the revision of sugarcane FRP and Sugar MSP. This would encourage more efficient utilization of sugarcane for ethanol production.
2) Minimum Selling Price of Sugar (MSP) Alignment: The sugar industry expects the MSP for sugar to be raised from ₹3100 to ₹4200 per metric ton (MT) to align with the increased Fair and Remunerative Price (FRP) ₹3400/- per MT for the sugar season 2024-25. This adjustment would help stabilize the industry’s revenue.
3) Consolidated Farming at Village Level: Allocating budget for enhancing land productivity through consolidated farming at the village level would benefit sugarcane cultivation as well as more cane availability of cane for Ethanol Blending Program.
4) Incentivised Power Co-Generation: Providing funds to States for incentivized power co-generation plants that run on bagasse (a by-product of sugarcane processing) can boost energy production and reduce waste.
5)Support for Sugar Cane Harvesters: Allocating additional funds to incentivize sugar cane harvesters would improve labor conditions and productivity.
6) Drip Irrigation Subsidy: A one-time nationwide policy with increased subsidies for drip irrigation schemes could enhance water efficiency in sugarcane cultivation as well as yield per hectare.
7) Long-Term Sugar Import-Export and Ethanol Production Policies: Clear policies on sugar import-export and ethanol production would provide stability and predictability for the industry.
8) Loan Restructuring: The industry seeks restructuring of outstanding loans with a repayment period of 10 years and a 2-year moratorium period. This would provide financial relief and flexibility.
9) Interest Subvention Scheme: The announcement of an interest subvention scheme would help reduce the cost of borrowing for sugar mills and related businesses. This will be immediate relief to the industry.
10) Priority Sector Status: Inclusion of the sugar industry which is the second largest industry after textile of the country, in the “Priority Sector” category would enhance access to credit and other benefits.
Remember, these expectations of the Indian Sugar industry aim to strengthen the industry’s financial position and promote sustainable practices. Hence, the sugar industry of the country is hoping for a positive announcement in the upcoming budget 2024-25.
P.G. Medhe is the former Managing Director of Shri Chhatrapati Rajaram Sahakari Sakhar Karkhana Ltd and sugar industry analyst. He can be contacted at +91 9822329898.
