Tamil Nadu mills’ woes: Government moots bankers’ meet

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Published: September 26, 2019 1:07:49 AM

At the meeting, farmers’ representatives expressed their grievances and raised issues of persistent drought, withering crops, unpaid dues and mounting debts.

A representative from South Indian Sugar Mills’ Association (SISMA), has requested for staggering repayment, deep restructuring of dues and a special relief package to the entire industry. A representative from South Indian Sugar Mills’ Association (SISMA), has requested for staggering repayment, deep restructuring of dues and a special relief package to the entire industry.

The union government has assured that it will resolve the problems faced by sugar mills in Tamil Nadu and ensured that a special State Level Bankers’ Committee (SLBC), led by Indian Overseas Bank (IOB), to address all issues of the mills and farmers.

After holding a high-level meeting here to discuss issues relating to sugar industry and cane growers of Tamil Nadu, Pankaj Jain, additional secretary, department of financial services under the Union finance ministry, said that the sugarcane industry in Tamil Nadu has always played a vital role in rural economy, generating large scale direct employment apart from vitalising the entire ecosystem around them.

“The Union government is keenly looking into the market challenges and pricing fundamentals. I strongly believe that with the sincere and coordinated efforts of banks, sugarcane mills, cooperative societies, RBI, state government and central government, the issues will be resolved to the satisfaction of all stakeholders. SLBC Convenor in Tamil Nadu, IOB, can initiate the discussions on this matter through a stakeholders’ meeting at the earliest,” he said.

Apart from Jain, Suchindra Mishra, joint secretary DFS and joint secretary (sugars), department of food and public administration, also attended the meeting here.

Managing director & CEO of Indian Overseas Bank Karnam Sekar, who was among the bankers participating in the high-level meeting, assured the additional secretary that a special SLBC will be convened soon to discuss various issues and find solutions to the problems faced by the industry.

At the meeting, farmers’ representatives expressed their grievances and raised issues of persistent drought, withering crops, unpaid dues and mounting debts.

They also informed that increasing overdues/NPAs are affecting their financial sources. They requested for a special relief package to resolve the NPA issue (due to years of adverse conditions and cash strapped industry).

A representative from South Indian Sugar Mills’ Association (SISMA), has requested for staggering repayment, deep restructuring of dues and a special relief package to the entire industry. He said at least 14 of the 25 private sector sugar mills in Tamil Nadu will not commence operations in sugarcane season 2019-20 due to sugarcane shortage and liquidity constraints. Planting area has drastically come down which has resulted in poor capacity utilisation.

Further, it was informed that the industry has just started to turnaround with proper relief measures and to completely come out of the stresses, the banks and RBI should consider fresh loans and restructuring, he added.

Canara Bank managing director & CEO RA Sankaranarayanan said that banks are active partners in the industry and extending all support within the existing guidelines of RBI and GOI.

Indian Bank MD & CEO Padmaja Chunduru suggested that a common portal for sugar industry is the need of the hour where information relating to subsidy, bank loans, among other things, can be shared by mills, banks and cane growers.

Chief general manager, RBI, Chennai, informed that banks have leverage to frame guidelines to special situations and to implement strategies.

Due to severe drought over the years, the capacity utilisation of sugar industry in Tamil Nadu fell from 99% in 2011-12 to 35% in 2018-19 and the production in the state also fell from 2.38 million tonne in 2011-12 to less than 1 million tonne in 2018-19, sources said.

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