Mumbai, September 7 (Daily Kiran) : The Maharashtra government has announced significant changes to the loan approval process for cooperative sugar mills facing financial difficulties. This reform aims to expedite financial assistance from the National Cooperative Development Corporation (NCDC).
In a government resolution issued on September 7, the state has eliminated the multi-tier ministerial review system and transferred full responsibility to an expert committee. This new committee will be chaired by the state’s sugar commissioner.
Previously, loan proposals underwent a rigorous review by various technical and financial committees, followed by approval from a high-level ministerial committee that included the finance minister, the cooperation minister, and the sugar commissioner. Ultimately, the proposals were sent to a cabinet subcommittee for final approval.
The new structure removes these intermediary steps, which the government believes will reduce administrative delays and enable quicker financial support for eligible cooperative sugar mills. Officials noted that the current finance department is also overseen by the chief minister, creating practical challenges in the previous recommendation process.
Now, the joint financial and technical committee, led by the sugar commissioner, will assess the viability of proposals and make recommendations directly. The government has stated that only proposals from economically viable mills capable of efficient operations will be recommended for approval.
The committee will include representatives from the Maharashtra State Cooperative Bank, the Maharashtra State Cooperative Sugar Factory Federation, and senior officials related to finance, administration, and audit from the sugar commissioner’s office.
This change comes at a crucial time as Maharashtra’s cooperative sugar sector grapples with financial challenges. Both the Maharashtra State Cooperative Bank and district central cooperative banks have tightened lending to mills that have defaulted on previous loans. Many financial institutions now require a state government guarantee before extending new working capital.
To address this situation, the state government has been providing financial assistance to struggling cooperative sugar mills through the NCDC. Under a special scheme launched in May 2023, margin money loans are granted with a guarantee from the state government.
Officials believe that the expert committee’s evaluation will facilitate faster funding for eligible mills, ensuring timely payments to sugarcane farmers and preventing disruptions in the economic activities of the state’s sugar-producing regions.
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