Maharashtra Government Proposes Rs 4,000 Crore Soft Loan for Cooperative Sugar Mills

Mumbai, 24th August 2026: The Maharashtra government is preparing to provide around ₹4,000 crore in soft loans to cooperative sugar mills facing financial difficulties due to lower sugarcane production, rising input costs and a shorter crushing season.

The proposal, prepared by the Cooperation Department, has been sent to the Finance Department for final approval. The government is looking to approve the scheme before the upcoming sugarcane crushing season.

According to the proposal, eligible sugar mills will be selected after examining their financial statements, balance sheets and overall performance. The loans are intended to provide mills with working capital and help them clear pending payments to sugarcane farmers.

This year’s adverse weather conditions have reportedly resulted in a 12-15% decline in sugarcane production. Rising temperatures also shortened the crushing season to around 80–90 days, causing an estimated loss of nearly ₹3,300 crore to the sugar industry.

The government is expected to bear the interest burden on the proposed loans, estimated at around ₹600 crore. The interest would reportedly be paid to banks by the government over a period of five years.

Cooperation Minister Babasaheb Patil said the government was working to get the proposal approved before the new crushing season. He added that the government was also considering restructuring loans taken by private sugar mills.

The sugar industry has also sought an increase in the minimum selling price of sugar and restructuring of existing loans. Industry representatives have argued that rising production costs and increased sugarcane procurement costs have put further financial pressure on mills.

The proposed soft-loan package is aimed at providing immediate financial support to cooperative sugar mills and helping them meet their obligations, including pending payments to sugarcane farmers.