The Uttar Pradesh government cracked the whip by lodging FIRs against defaulting private sugar mills for failing to clear cane growers’ arrears of nearly Rs 7,000 crore.
The Yogi Adityanath government had fixed a deadline of August 31 for the sugar mills to clear the cane arrears.
The delay in payment of cane arrears by sugar mills is not only causing embarrassment to the government but also leading to law and order problems as thousands of farmers marched to Delhi and staged demonstrations on September 22.
Besides, recovery certificates (RCs) have also been issued against some units. The RCs authorise the district administration to seize movable and immovable assets of sugar mills, including sugar stock, for auction so that the liabilities are settled.
A UP Cane department official said that FIRs against defaulters had been lodged under stringent Section 3/7 of Essential Commodities Act (ECA),1955 and section 420 and 120 (B) of the Indian Penal Code (IPC).
The department has warned that if companies still do not ensure speedy payments, further action will be taken against them.
The mills have failed to settle their payment commitments despite repeated warnings and reminders by the government.
The sugar industry collectively owes cane dues of nearly Rs 7,000 core on September 1. So far, mills have paid Rs 27,460 crore to farmers out of a total of Rs 33,048 crore of 2018-19 crushing season. This leaves almost Rs 5,588 crore as outstanding, of which the private sector accounts for Rs 5,200 crore or 88 per cent of the dues.
“Following  the coercive government action, private millers have settled Rs 450 crore of dues in the last  seven days , while some have promised to pay Rs 500 crore soon. So far, 30 private mills have settled their dues and in the next few days, 20 more would follow suit,” the official said.
In 2018-19 crushing season, a total of 119 state mills, including 94 private, 24 cooperative and a UP State Sugar Corporation unit, participated in crushing operations with sugar output totalling 11.8 million tonnes (MT) as compared to over 12 MT in 2017-18.
The next crushing season is set to begin from October end. While west UP units would start operating after Diwali (October last week), mills in central and east UP have been asked to start operation by the first week of November.