In the week following the announcement of Lok Sabha elections and the imposition of the model code of conduct, a cabinet sub-committee approved state guarantees on loans totaling Rs 1,898 crore for 13 sugar mills. These guarantees enable the mills to seek loans from the National Cooperative Development Corporation (NCDC), facilitated through the finance department.
According to the news report published by The Times of India, on January 4, 2023, the Maharashtra government had prohibited state standing guarantees for sugar mills. However, by July 2023, the state had sanctioned loan guarantees amounting to Rs 549 crore for sugar mills from the NCDC. Notably, the beneficiaries of this decision were sugar mills affiliated with BJP leaders, including Ranjitsinh Mohite-Patil, Harshvardhan Patil, Dhananjay Mahadik, Abhimanyu Pawar, and Raosaheb Danve.
In September 2023, following Ajit Pawar’s inclusion in the government, the state reversed its stance on providing bank guarantees for loans obtained by sick sugar mills. Consequently, loans totaling Rs 631 crore were extended to sugar mills associated with individuals close to the NCP. However, this later fell through as MSCB had reservations about the loan conditions.
As per report, in 2018 and 2019, the state had to disburse Rs 1,049 crore to the MSCB for guarantees extended to 12 sugar mills that subsequently defaulted on their loans. These guarantees were necessitated following a Supreme Court order. Prior to this order, the state had already disbursed Rs 70 crore in guarantees to sugar mills.
