The Hindu : National : “Implement sugar package in 10 days”

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Wednesday, Feb 13, 2008
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National

“Implement sugar package in 10 days”

Special Correspondent

NEW DELHI: The Central government on Tuesday asked the public sector banks (PSBs) to implement a sugar package involving the provision of interest-free loans to sugar mills and submit a compliance report in the next 10 days.

Speaking to newspersons after a meeting with the chairmen of PSBs, Finance Minister P. Chidambaram said: “In the next 10 days, the package will be implemented for all sugar mills, which apply under the scheme.”

In December last year, the government had notified that a relief package would allow sugar mills to avail of interest-free loans for clearing their cane price arrears of 2006-07 and 2007-08 sugar seasons (October-September).

Mr. Chidambaram pointed out that three banks, namely Punjab National Bank, Indian Bank and Indian Overseas Bank, had already implemented the relief package. “PNB has given me a list of sugar companies for which it has implemented the package,” he said. The other public sector banks have been directed to complete the exercise by February 22 and submit the final report to show how many sugar mills had been provided the easy credit facility.

The sugar mills will have to repay the loan in four years, including a two-year moratorium period. Banks are to provide loans equal to the notional Central excise duty payable by sugar mills on their total output of the sweetener during 2006-07 and 2007-08 sugar seasons.

Seek tax exemption

Meanwhile, the PSB chiefs have asked Mr. Chidambaram to exempt from income tax the interest earned from investments in infrastructure bonds pertaining to sectors such as power and roads. They also sought exemption from FBT (fringe benefit tax) on their contribution to pension and other funds, besides asking for simpler rules on tax deduction at source (TDS) on deposits.

Suggestions

“They [banks chiefs] have made a number of suggestions. Most of these are related to income tax. Couple of them are old ones which are repeated every year, but there are suggestions which are worthy of consideration... I told them I will examine those suggestions,” Mr. Chidambaram said.

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