NEW DELHI: A group of ministers has zeroed on production-linked subsidy scheme for sugarcane farmers, imposition of sugar cess and reducing GST on ethanol as a part of the government’s bid to clear the rising arrears of farmers. Currently, arrears have scaled more than Rs 19,000 crore and nearly half of it is owed by Uttar Pradesh millers.

“There were several suggestions like production linked subsidy, sugar cess and reduction of GST on ethanol from 18 % to 5%. We will place all the three proposal before the Cabinet ,” food and consumer affairs minister Ram Vilas Paswan told reporters after the meeting on Monday evening.

Sources said government will soon take a call on the quantum of sugar cess per kg that could be levied, while the production-linked subsidy could be of around Rs 5 per quintal of sugarcane, which would be debited to the farmers’ account directly.

Petroleum minister Dharmendra Pradhan said the proposal to reduce the GST on ethanol will definitely be pushed since this is a clean fuel for automobile. “We have assured that the petroleum ministry will ensure procuring the entire ethanol that millers will produce,” Pradhan told TOI.

The proposals have come amid allegations from some farmers in Western UP and Haryana that millers have stopped issuing indents. Indents are written commitments by sugar mills to farmers that they would purchase the crop from the pre-demarcated areas at the announced rate.

