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Bitter Aftertaste Of Sugar

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Bitter Aftertaste Of Sugar
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Its sops to powerful cooperative sugar factories have pushed an already debt-ridden Maharashtra government deeper into financial morass. Last week, the debt recovery tribunal asked the RBI to freeze the state’s treasury account to recover loans worth Rs 81.67 crore from six cooperative spinning mills. The factories had defaulted on state-guaranteed loans to the IDBI and IFCI. The tribunal also ordered the recovery of Rs 28 crore on behalf of the Jalgaon-based Chopda sugar factory. This is the first time the state’s treasury account has been blocked. To make sure the state paid up, the tribunal ordered that money be withdrawn daily from the frozen account and paid to the FIs. Luckily, the Bombay High Court stayed the order and the government assured it wouldn’t dole out such unconditional guarantees. But with most politicians controlling cooperative sugar factories in the state, that is one pledge no Maharashtra government can fulfil.

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