Govt cleared Rs 1,900cr sugar mill guarantees before poll code

MUMBAI: In the week before Lok Sabha elections were declared and the model code of conduct imposed, a cabinet sub-committee cleared state guarantees on loans worth Rs 1,898 crore to 13 sugar factories. A bulk of these are linked to politicians from BJP and NCP (Ajit Pawar) faction.
The guarantees will let the factories apply for loans from National Cooperative Development Corporation (NCDC), routed through the finance department.
On January 4, 2023, the Shinde govt had ordered against state standing guarantees for sugar mills.
However, by July 2023, the state had cleared loan guarantees to sugar factories worth Rs 549 crore from NCDC. Beneficiaries of the decision were sugar factories controlled by BJP leaders, which included Ranjitsinh Mohite-Patil, Harshvardhan Patil, Dhananjay Mahadik, Abhimanyu Pawar and Raosaheb Danve.
In September 2023, after Ajit Pawar joined the govt, it reversed its decision of not giving a bank guarantee for loans taken by sick sugar factories. Subse quently, loans worth Rs 631 crore were given to sugar factories run by those close to NCP. However, this later fell through as MSCB had reservations about the loan conditions. Bank guarantees given to sugar mills in the past has put a massive financial burden on the state. In 2018 and 2019, the state had to pay Rs 1,049 crore to MSCB for guarantees given to 12 sugar factories which later could not repay the loan. The guarantees had to be given after a SC order. Prior to the order, the state had already paid out Rs 70 crore in guarantees to sugar factories.