The expert panel, which set up the NCDC ,has also suggested that the revival programme should include modernisation and technical upgradation of plants and setting up of power cogeneration and ethanol production facilities. The panel suggested that 60% of the total revival package should be met through soft loans from the Sugar Development Fund (SDF), 30% would be interest free investment loans from NCDC to state governments to be passed on as equity in cooperatives. The balance 10% investment should be done by the cooperative society.
The Patil panel surveyed 315 cooperative sugar mills and found 125 ailing units. Out of these 125 sick cooperatives, it recommended the revival of 100 units. The panel suggested that the central government provide an interest subsidy of 10% per annum to NCDC towards its cost of funds. The central government should also sub-vent by way of interest subsidy on working capital loan to the extent of 4% per annum.
As per the panels formula, the central government would provide a total interest subsidy of Rs 510 crore, NCDC will provide Rs 2,600 crore in total, and Rs 1200 would be extended by the SDF. Cooperative societies would make an investment of Rs 200 crore. It suggested the SDF should provide relief to its outstanding loans by waiving 50% of the interest accrued on its loans till the commencement of repayment of loan.