Sugar policy extended for one year; 18 new sugar mills proposed

Lucknow, Nov 13 (UNI) Encouraged by the massive investments in sugar industry, the Uttar Pradesh government has extended the validity of the new sugar industry promotion policy for one more year, till March 2008.

The validity of the policy announced in 2004 was to end in March 2007. The term of the policy has been extended to enable the investors to avail tax benefits under the new sugar policy. As many as 18 new sugar mills are proposed to be set up in the state during the next fiscal (2007-08).

Official sources here today said the policy has been extended for one more year so that the industrialist could avail the facilities.

The state cabinet has already approved the proposals of extension of the policy till March 2008.

The new sugar policy provided for several tax benefits to the new sugar refineries investing between Rs 350 crore to Rs 500 crore, for five years and ten years respectively. The tax benefits are subject to the new unit giving direct employment to 1000 persons and make payment to the sugarcane growers as per schedule.

The tax benefit include the exemption from the 'trade tax on molasses and central sales tax and also exemption from the administrative fee imposed by the state government.

The policy also provides for the exemption from the stamp duty on the registration of land for the sugar unit and also capital subsidy to the tune of ten per cent of the total investment in the new sugar unit.

The policy seeks to encourage the establishment of new sugar mills, as well as capacity expansion in existing units and allied industries such as production of ethanol, and potable alcohol from the molasses and establishment of co-generation units from bagasses.

Since the announcement of the new policy in August 2004, for attracting investment in the sugar industry in the state, so far over Rs 5,000 crore have been invested in new units and capacity expansion.

Besides adding fresh crushing capacity the sugar policy has also added to the co-generation of power in sugar mills and addition in total installed capacity of Ethanol and potable alcohol.

The new policy has so far added power generation capacity from the co-generation to the tune of 732.86 MW. The Power Purchase Agreements between the sugar mills and UP Power Corporation Limited (UPPCL) have been signed and endorsed by the Power regulator UP State Electricity Regulatory Commission.

Of the total PPA signed, 194.36 MW has been commissioned and 352 MW is scheduled to be commissioned in current season 2006-07 while 156 MW is targeted to be commissioned in next fiscal 2007-08.

In 2004-05, ten new mills were established adding fresh crushing capacity of 65,000 TPD (Tonne per day). In current crushing season 2006-07, as many as 10 mills will commence production with an estimated investment of Rs 3,000 crore. The ten new mills will add fresh cane crushing capacity of 1.12 Lakh TPD.

The state government has received proposals for as many as 18 new sugar mills in the state. The proposal is likely to materialize by the end of 2008.

UNI MB NAB PV BD1231