The Hindu Business Line : Excise duty on molasses `retrograde'

THE Finance Minister's decision to considerlooking into the problems of the sugar industry is welcome but the sharp increase in the excise duty on molasses will hit the industry very deeply.

It is a highly retrograde step. Today 50 per cent of the molasses goes to the liquor industry and the balance is used by the unorganised sector.

A flat hike from Rs 500 per tonne to Rs 1,000 in the excise duty structure will affect the unorganised players.

This sector cannot really pay.

From the industry's point of view, the factories that are engaged in the sale of molasses are more likely to be hit hard than those with a distillery unit as well.

The hike defied the Common Minimum Programme (CMP) of the UPA Government.

In a year of sugar and molasses surplus, the downward slip in the rate would be sharp and this will affect the industry.

The financial package with a moratorium for two years on both principal and interest, rescheduling the payment plan and renegotiation of high interest loan rates are welcome measures, aimed at bailing out the sector.

(As told to L.N. Revathy)

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