State finance minister Jayant Patil in his reply to the debate on state budget for 2007-08 in the state legislature on Thursday announced waiver of sugarcane purchase tax for 2006-07 for state's sugar industry which was struggling to tackle the excess sugarcane and falling sugar prices.
Patil said the decision was aimed at providing some relief to the beleagured industry.
"The sugar factories which have already paid the purchase tax for this period will be compensated for next year," he added.
"Due to adverse factors like falling prices it has become difficult for the sugar industry to even pay statutory price to sugarcane growers," Patil said.
Patil's package is crucial as the Centre has announced a hefty Rs 850 crore package comprising buffer stock of 20 lakh tonnes and an export subsidy for the sugar industry.
Patil also announced a hike of Rs 20 lakh in the legislators' development fund, which would now be of Rs 1 crore compared to the earlier Rs 80 lakh.
The announcement followed noisy scenes created by the ruling and opposition members in the legislature last week demanding that the fund be increased to Rs two crore.
The minister defended the government's various initiatives to tackle state's financial problems.
As a result of the "prudent" fiscal measures, the debt burden situation had improved considerably, he said.