The Union Cabinet may on Wednesday consider a proposal to provide export subsidy worth Rs 3,600 crore to sugar mills for the marketing year 2020-21, as part of its efforts to help them clear outstanding dues to sugarcane farmers, according to sources.
The food ministry has proposed Rs 3,600 crore subsidy for exports of 60 lakh tonnes of sugar in the marketing year 2020-21 (October-September), they added.
The sources said the proposal is likely to be taken up by the Cabinet in its meeting on Wednesday (December 16).
In the previous marketing year 2019-20, the government provided a lump sum export subsidy of Rs 10,448 per tonne, costing the exchequer Rs 6,268 crore.
The ministry has proposed lower export subsidy for the current marketing year 2020-21.
Mills exported 5.7 million tonnes of sugar against the mandatory quota of 6 million tonnes set for the 2019-20 season (October-September), according to official data.
Last month, Food Secretary Sudhanshu Pandey said the government is reconsidering extension of sugar export subsidies as India has got good opportunity to sell the sweetener in the international market.
India, the world's second-largest sugar-producing country, had to offer export subsidies during the past two years to reduce surplus stocks and help cash-starved sugar mills clear cane payment to growers.
"Thailand's production is expected to be down this year, while Brazil's crushing will only start in April 2021. From now till April, there is good export opportunity for India," the secretary had said.
"This is the opportunity the industry has to encash upon, we are doing our best given that India is expected to have a bumper sugar production this year," he added.
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