This was decided at the Udyami Panchayat, which was attended, among others, by chief minister Nitish Kumar, deputy CM Sushil Kumar Modi, Power Minister Brijendra Yadav, Industry minister Renu Kumari and Chief Secretary Ashok Kumar Sinha and the top officials.

Besides, representatives of Confederation of Indian Industries, Bihar Chamber of Commerce and Industries and several leading sugar mills of the country such as Tirupati Sugar Mill, Birla Group, Bharat Sugar Mills and Harinagar Sugar Mills were also present.

After hearing problems of sugar producers, Nitish ordered preparation of a new policy providing increased subsidy for sugar production than what is existing now as per sugar production policy of 2006.


Bihar Sugar Mills Association gave its suggestions regarding new sugar incentive policy at the meeting dedicated to sugar industry and sugarcane production.

According to the principal secretary, industry, Navin Kumar Verma, the state government took note of the suggestions.

Principal Secretary, Sugarcane, Sudhir Kumar, said the draft of the sugar incentive policy would be available on the department’s website for further suggestions and a final decision would be taken by December 31.

Among other things the Panchayat discussed the constraints in higher productivity of sugarcane and poor recovery of sugar and the initiatives taken to achieve this goal.

It has been decided to take over the existing Sugarcane Research Institute. It would now be an autonomous institution under the control of sugarcane industries department and would be developed on the lines of Vasantdada Patil Sugarcane Research Institute, Maharashtra, and Saharanpur Sugarcane Research Institute, UP.

The Association sought revision of the 2006 incentive package in the light of Industrial Incentive Policy, 2011, and formulation of incentive package for gur and khandsari units, revision of rate of molasses and alcohol, imposition of entry tax on alcohol coming from outside the state, formulation of ethanol policy, exemption from payment of entry tax on plant and machineries and fixation of rate of power generated by co-generation units of sugar mills.

The entrepreneurs were informed about the investment opportunities in sugarcane and allied industries, which include green field sugar complex, capacity expansion of existing sugar mills, manufacture of molasses-based ethanol, alcohol and commercial spirit.

Some producers complained that though they pay 12 per cent VAT they get 10 per cent subsidy. But those producing sugar outside the state and selling it in Bihar pay only two per cent Central Sales Tax. They thus sought entry tax on outside producers.

Bihar produced 177.47 lakh tonnes of sugarcane in 2011-12, which is fifth in the country after Uttar Pradesh, Maharashtra, Tamil Nadu and Karnataka. But with scores of sugar mills close, the state produced only 4.51 lakh tonnes of sugar in 2011-12 as compared to 89.96 lakh tonnes by Maharashtra, 69.96 lakh tonnes by UP and 37.57 lakh tonnes by Karnataka.

Officers present at the meet assured that the entry tax or import duty for sugarcane would be introduced as in its absence the local sugar industry is not growing. Sugar from Karnataka, Maharashtra and even as far as Brazil come to the state freely. The big sugar-manufacturing houses have set up their offices in Bihar and they don’t have to pay any entry tax because there is no provision for it.