In August 2016, the government of India announced a change in financial export support and a change in production support.



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Inception date: 03 Aug 2016 | Removal date: 30 Sep 2017

Production subsidy

 On 3 August 2016, the India Cabinet Committee of Economic Affairs approved a formula to provide production subsidy to sugar mills. The quantum of subsidy will be proportionately based on the achievement of their export targets and ethanol supply targets (for mills with distillery capacity), both the targets being given equal weight. The amount of subsidy has not been announced in this press release, however, it may continue to be INR 4.50 per quintal of sugar crushed as was provided for the 2016-17 season (1 October - 30 September) but withdrawn prematurely on 19 May 2016 (see related measure).
The export targets under the Minimum Indicative Export Quota (MIEQ), which were withdrawn on 8 June 2016, will be used as the measure to decide the quantum of subsidy (see related measure.) However, for this purpose the level of export target that had been scaled at "15.70 kg. of sugar for each tonne of estimated sugarcane crushing by the mill" has been revised to "15.70 kg of sugar for each tonne of sugar actually crushed by the mill in the current sugar season or the earlier MIEQ, whichever is lower".
Similarly, the ethanol supply targets have been revised to the actual quantity contracted by the mills with the Oil Marketing Companies. In case of distilleries that have not entered into any such contracts as on date of the notification, the earlier notified allocation will be applicable.