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Uttar Pradesh to sell off loss-making sugar mills

Uttar Pradesh, the second largest producer of sugar in the country, plans to sell 22 of its 30 state-owned, loss-making sugar mills, an official said on Saturday.

Uttar Pradesh, the country's second largest and most populous state, produces 4.75 million tonnes of sugar each year, 28 per cent of India's sugar production.

While 11 "sick" mills were to be immediately put up for public auction, 11 other loss-making ones were likely to be privatised later, the state's top bureaucrat said.

"Outdated and worn-out machinery had rendered these mills obsolete. Despite increasing losses, these mills were kept alive only with repeated doses of government subsidies causing much drain to the state exchequer," said A P Verma, the state's chief secretary.

Though the remaining eight sugar mills were barely able to break even, the government planned to retain them in the public sector under a new holding company, Verma added.

The 30 sugar mills have run up accumulated losses worth Rs 17.24 billion, officials said.

But they said the government hoped to find buyers for these mills as many of them had vast tracts of real estate.

The buyers would also get a five-year tax holiday, Arun Kumar Misra, the state's sugar industries secretary, said.

Uttar Pradesh, which has 27 sugar mills in the cooperative sector and 49 in the private sector, is also India's largest producer of sugarcane.

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