Maharashtra revamps sugar mill funding mechanism to speed up NCDC assistance

Mumbai, Sep 7 (SocialNews.XYZ) In a move aimed at accelerating financial assistance to struggling cooperative sugar mills, the Maharashtra government has revamped the approval process for margin money loans from the National Cooperative Development Corporation (NCDC), replacing a multi-layered ministerial mechanism with a single expert-led committee.

Under a Government Resolution (GR) issued on Monday, the state has abolished the ministerial committee that previously vetted loan proposals and entrusted the entire technical and financial appraisal process to a newly constituted committee headed by the Sugar Commissioner. The move is expected to reduce procedural delays and facilitate quicker disbursal of funds to eligible cooperative sugar factories.

Previously, under a policy framed on September 5, 2019, loan applications underwent a complex, multi-stage review. Proposals were first evaluated by joint financial and technical scrutiny panels, passed to a high-level ministerial committee -- which included the Finance Minister, Cooperation Minister, Minister of State (Cooperation), and the Sugar Commissioner -- and finally submitted to a Cabinet Sub-Committee chaired by the Cooperation Minister for final sign-off. ​

The restructuring removes the ministerial intermediate layer entirely. According to cooperation department officials, the shift was necessary to resolve structural protocol issues. With the Chief Minister currently holding the Finance portfolio, having the ministerial panel route recommendations to the Cooperation Minister created administrative friction. ​

Under the streamlined process, the newly consolidated Financial and Technical Committee under the Sugar Commissioner will directly handle the technical and financial vetting, determining viability and submitting recommendations directly. ​

The government resolution emphasises that future funding recommendations must be strictly performance-linked. "It is necessary to examine and scrutinize whether the proposals of cooperative sugar factories to be recommended to NCDC will become economically viable and capable of functioning efficiently," the GR stated. ​

The new single committee brings together key technical, financial, and industry representatives to conduct comprehensive appraisals.

The committee will be headed by the Sugar Commissioner, Maharashtra, and it will comprise representatives from the Maharashtra State Cooperative Bank (MSCB) and the Maharashtra State Cooperative Sugar Factories Federation Ltd.

In addition, the committee will include representatives from the Vasantdada Sugar Institute (VSI), alongside key officials from the Sugar Commissionerate, including the Director of Sugar (Finance), Director of Sugar (Administration), Joint Registrar (Auditor), Joint Director (By-products), and Executive Engineer. ​

The procedural easing comes at a critical time for Maharashtra’s cooperative sugar sector. With the Maharashtra State Cooperative Bank and district central cooperative banks (DCCBs) taking a firm stance against lending to mills that have defaulted on existing debt, traditional credit avenues have dried up.

Lenders have increasingly demanded state government guarantees before extending fresh working capital ahead of upcoming crushing seasons.

​To bypass the deadlock and protect the rural economy, the state government has relied on the NCDC -- a central statutory body under the Ministry of Cooperation -- to funnel financial relief to weak cooperatives.

Under a dedicated state scheme launched in May 2023, margin money loans are routed through the state government, which acts as a guarantor. ​By entrusting evaluation to a technical committee of experts, the state aims to speed up capital deployment to eligible mills, ensure timely payments of Fair and Remunerative Price (FRP) dues to sugarcane farmers, and maintain economic stability across the state's sugar belt.

Source: IANS