UP withdraws sugar incentive scheme

New Delhi: The newly elected Mayawati government in Uttar Pradesh has withdrawn the incentive scheme for sugar millers.

The state's cabinet also decided to privatise 40 sick state-run sugar mills with accumulated losses of over Rs 3,500 crore.

Under the scheme millers got capital and transport subsidies and exemption from local taxes.

The new policy, which would include payment of farmers' dues as well as defining the proposed role of the private parties, would soon be placed before the state cabinet for necessary approval, state cabinet secretary Shashank Shekhar Singh said.

The sugar industry, however, has sought restoration of 10 per cent capital subsidy in the next policy of the Uttar Pradesh following the new government's decision to scrap the earlier policy.

Uttar Pradesh is the country's top cane producer and second largest sugar producer.

After the state government announced a new policy for the sugar sector in 2004, at least 28 new sugar mills with large capacities have come up till date.

According to an estimate, UP has received Rs 8,000 crore investment in the sugar sector under the 2004 policy.

The state cabinet also decided to effect some changes in Diversified Agriculture Support Project (DCSP), presently implemented in 35 districts, involving private people including commission agents in purchase of wheat.

The project is currently been implemented under the umbrella of Mandi Parishad and role of private people was limited to the areas of infrastructure, seeds and fertilizers.