The Uttar Pradesh sugar industry, which is already in red, received a body blow with Punjab almost closing its door for sale of sugar from UP by imposing 11 per cent entry tax thus affecting the sale of over 15 lakh tonnes of sugar in Punjab.
“The Punjab Government’s decision has adversely affected UP sugar industry. The Government decision of 11 per cent entry tax on sugar from other states was taken to protect its own industry but has affected sugar mills of western UP,” Deepak Gupatara (rpt Guptara) of Uttar Pradesh Sugar Mills Association (UPSMA) told The Pioneer here on Monday.
This Punjab Government order comes into affect from June 1. UP is the only state which sells its sugar in Punjab.
Punjab has nine cooperative and the seven private sugar mills which are running in huge losses and have unpaid dues amounting to almost Rs 700 crore after Punjab increased its State Advised Price (SAP) on cane to Rs 295 per quintal. Punjab needs at least 60 lakh tonnes of sugar annually for its need and it gets almost 15 lakh tonnes of sugar from Uttar Pradesh.
“Sugar from UP goes into all its neighbouring states of Madhya Pradesh, Haryana, Delhi, Himachal Pradesh and Bihar. In all these states movement of sugar is free. The entry tax in Punjab has given us a jolt,” Guptara said.
The sugar industry is passing through a bad phase. Sugar Mills Association say that even a soft loan of Rs 6000 crore promised by the Modi Government will not bail them out. “Until Governments, both state and central, allow the market forces to operate the situation will not come under control,” he said.
Though the crushing season has come to an end the sugar mills are yet to pay Rs 5360 crore. The state government has filed 19 FIRs against private mills on Sunday for not clearing the dues. The millers say that as the retail price of sugar has come down to Rs 2300 per quintal they are suffering a loss at the rate of Rs 1,100 per quintal.
“At this rate sugar production is no longer a profitable proposition. Many sugar mills have closed down and a few are on the verge of winding up their business,” Gupatar said.
He is not off the mark. Before 2004 there were around 100 sugar mills but in 2005 Mulayam Singh Yadav Government offered concessions and with the result many entrepreneurs set up mills in UP. Post 2004 there were 130 mills operating in private, co-oprative and corporation sectors. But in last one decade 12 mills have close ddown and six have gone under BIFR.
Sugar is a big industry in UP which accounts for 13 per cent of GDP of UP. Besides, over 2 lakh employees and 44 lakh families are dependent on this crop. “If corrective measures are not taken now it will be requiem for this industry in UP,” UPSMA official said.