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Friday, Aug 12, 2005

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Cabinet clears new minimum price for sugarcane

Our Bureau

New Delhi , Aug 11

THE Government has fixed the statutory minimum price (SMP) for sugarcane at Rs 79.50 at nine per cent recovery of sugar for the forthcoming sugar season of October 2005-September 2006.

For every additional 0.1 percentage point recovery, sugar mill owners would have to pay a premium of 88 paise. At present the SMP is fixed at Rs 74.50 for 8.5 per cent recovery. This will be the minimum price to sugarcane growers.

"The Cabinet Committee of Economic Affairs (CCEA) has fixed the SMP of sugarcane at Rs 79.50 per quintal linked to nine per cent recovery," the Information and Broadcasting Minister, Mr Jaipal Reddy, told reporters adding that the move is based on recommendation of the Commission for Agricultural Costs and Prices.

The CCEA also accepted the recommendation of the empowered Group of Ministers to restart the Dabhol Power project, Mr Reddy said.

According to Government officials, the empowered Group of Ministers on Dabhol had worked out a series of financial concessions to ensure that the tariff from the project was kept in the Rs 2.30-2.50 per unit range. This included a waiver of capital gains tax on the transfer of ownership of the project, along with customs duty waiver on the LNG for the plant.

A 10-year tax holiday under 80 IA of the Income Tax Act, applicable for new projects, will also to be extended to the project.

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