1) †††††††† Description of Scheme


             NCDC has been promoting establishment and development of sugar factories in the co-operative sector so as to help them in achieving the primary objective of ensuring remunerative prices to the farmers for sugarcane by providing the following assistance:

i)  Investment loan assistance to the State Governments to supplement their resources for equity participation in new co-operative sugar mills.

ii)  Term loan assistance for setting up of new mill and to the existing co-operative sugar mills for modernisation/expansion of capacity.

iii)  Term loan assistance for establishment of sugar by-product units.

iv)  Margin Money assistance to the existing co-operative sugar mills.

v)  Short/medium term loan towards working capital requirements of coop. Sugar mills.


2)††††††††† Details about dovetailing Govt. of India scheme (s)


i)  The scheme for providing term loan assistance to existing coop. sugar mills for modernisation/expansion and also setting up of by-product units are dovetailed with the soft loan assistance from the SDF of the Union Ministry of Consumer Affairs, Food & Public distribution towards meeting the shortfall in promotersí contribution. SDF assistance would be routed through NCDC even if the term loan is provided by other financial institution or bank.†

ii)  NCDC has also been recognised as a financial institution by the Ministry of New & Renewable Energy (MNRE) for routing its capital subsidy for cogeneration projects under National Programme on BIOMASS POWER AND COGENERATION PROGRAMME being implemented by MNRE. (


3)††† †††††† NCDC'S assistance provided in the financial year 2017-18 and financial year 2018-19 upto 31.08.2018.


             During the year 2017-18, the Corporation has sanctioned and released assistance of Rs.3262.65 crore and Rs.2780.97 crore respectively for the development of cooperative sugar industry.† Cumulatively, it has provided assistance of Rs.15760.24 crore up to 31.03.2018.† During the year 2018-19, upto 31.08.2018, Corporation has released assistance of Rs.714.84 crore.

             During 2017-18, SDF has sanctioned and released assistance of Rs.62.15 crore and Rs.93.88 crore respectively for the modernisation-cum-expansion, ethanol and cogeneration projects and cane development activities through NCDC.††† Scheme-wise/State-wise details of assistance sanctioned and released cumulatively as on 31.3.2018 are given in Tables 1 & 2.



4)††††††††† Eligibility criteria and procedure involved


A. Investment loan for share capital participation in new cooperative sugar factories.


In view of the high project cost, limited resources available with the farmers and in order to promote cooperative sugar factories, the State Govts. have been contributing to the share capital of new cooperative sugar factories. This scheme is intended to supplement the resources of State Govts. to enable them to contribute to the share capital of cooperative sugar factories so as to expedite the project implementation. Under the scheme, Corporation provides investment loan assistance to the State Govts. up to 100% share of their stipulated equity, which is equivalent to 30% of the project cost of new mill. 60% of the project cost is raised as term loan from banks/ financial institutions and remaining 10% is to be contributed by farmer members.


Eligibility Criteria for Assisting New Mills

∑ Term loans tied up

∑ Placed orders for plant and machinery

∑ Adequate sugarcane potential

∑ Techno-economic feasibility


B. Term loan assistance for Modernisation-cum-Expansion of cooperative sugar mills.


In order to improve overall performance of the existing cooperative sugar factories, NCDC and SDF has been providing assistance for implementing modernisation-cum-expansion of sugar factories. With effect from 01.01.2015, SDF has stopped providing assistance for exclusively expansion projects.† However, SDF assistance is available for projects if expansion of capacity upto 5000 TCD alongwith cogeneration and/or Ethanol project.†


If SDF assistance is not available, then debt-equity ratio is normally 65:35. The equity part of 35% of the project is to be met by the society by way of additional share capital from members or out of its surplus funds. The NCDCís assistance is provided through the State Govt. as well as directly to the mill societies subject to fulfilment of eligibility criteria for direct funding.


Eligibility Criteria for assisting Modernisation cum Expansion Projects

∑ Adequate cane potential

∑ Techno-economic feasibility

∑ Capable of raising own share of project cost


C. Term loan assistance for establishment of sugar bye-product units.


With the shifting of profit centre of the sugar industry towards effective utilisation of bye-products of sugar industry, NCDC has been providing term loan assistance for setting up of projects based on bye-products' utilisation such as distillery/ethanol production, co-generation of power, alcohol based chemical plants etc. The debt equity ratio is 1:1. The equity is to be met by the society and/or State Govt. Soft loan from Sugar Development Fund is also available towards ethanol production & bagasse based projects.


Eligibility Criteria for Assisting Sugar By Product Units

∑ Techno-economic feasibility

∑ Capable of raising own share of project cost


D. Term loan assistance towards margin money requirements.


Corporation is also implementing a scheme to provide term loan towards margin money requirements of cooperative sugar factories for raising working capital from banks. Quantum of short/medium term loan assistance will be on case to case basis.


E. Working capital requirements


NCDC has introduced a scheme to provide short/medium term loan towards meeting part of working capital requirements of cooperative sugar factories. The assistance can be provided directly to the good working cooperative sugar mills or through the State Govt. The assistance can also be extended through the State Apex Coop. Banks providing working capital assistance to the sugar mill(s) directly/through DCCB.


5) †††††††† Impact of NCDCís assistance in the sector


 †††† The role played by NCDC in promoting and financing cooperative sugar mills has given a real boost to sugar industry. Consequently, the share of cooperatives in the national production of sugar has risen from 15.54 lakh tons in 1973-74 to 92.10 lakh tons (upto 31.03.2018) in 2017-18.

 †††† Increase in number of installed sugar mills from 102 in 1973-74 to 282 as on 31.03.2018.

 †††  Improvement in the socio-economic standards of farmers.

∑†††††  Cooperative sugar mills are acting as NUCLEI for area development.

∑†††††  Value addition and remunerative price to sugarcane growers.

†††††† The Sugar Development Fund (SDF) of the Ministry of Food, Public Distribution and Consumer Affairs, Govt. of India, ( provides soft loan to meet shortfall in promoters' contribution towards equity participation up to a maximum of 40% of the project cost, depending on financial resources of the coop. Sugar factories. The balance not less than 10% of the project cost is to be met by the society either by way of raising as additional shares capital or from its internal accruals.


6)††††††††† Registration of Manufacturers/Suppliers of sugar mill machinery to sugar cooperatives.


†††††††††††† The registration is not required now as it has been dispensed with vide Ministry of Agriculture, Department of Agriculture & Cooperation Office Memorandum No.R-11016/08/2015-I&P dated 23.06.2015.† A copy of OM is enclosed for reference of all concerned.