the Bihar government on December 28, 2007 announced a Rs 43 crore subsidy for sugar mills in Bihar to help clear the Rs 90 crore arrear of the crushing season 2006-07 to cane growers. The rest of the dues, Rs 47 crore, will be cleared when the state receives interest-free loans against excise payments, declared earlier by the centre. The state cabinet has also reduced the zonal development commission payable by the mills to the state on the purchase of sugarcane. It has been reduced from 1.8 per cent to 0.45 per cent for the 2006-07 season.
Nitish Mishra, cane development minister, Bihar, said the nine functional mills, out of 28, will be given a cash subsidy of Rs 7 per quintal for the total sugarcane crushed in the last season and Rs 17 per quintal for late crushers.
The state government has leased out six sick units to hpcl, Reliance India Ltd, Rolcon Project and s s Infrastructure Ltd. Six other mills have been taken over by the Infrastructure Development Authority, a Bihar-government undertaking. Fresh bids will be invited for the three remaining mills.
The mills will be given out on a lease for 60 years, which can be extended for another 30 years. The government hopes to earn Rs 300 crore from the leases and pay off labour dues, voluntary retirement schemes and statutory liabilities of financial institutions, said Mishra.
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