Gujarat govt's 'revolutionary' decision to provide Rs 1,500 cr financial relief to sugar cooperatives

Gandhinagar (Gujarat) [India], May 26 (ANI): Gujarat Chief Minister Bhupendra Patel has taken a landmark decision in the interest of sugarcane farmers and the cooperative sector by officially approving the sugarcane prices paid by cooperative societies.
Providing details of this decision, Agriculture and Cooperation Minister Jitubhai Vaghani stated that the State Government has granted official approval to the sugarcane prices paid by sugar cooperative societies to sugarcane farmers during the period from 2007-08 to 2014-15, according to the release.

This decision of the State Government will provide an estimated financial benefit of Rs. 1,500 crore to Gujarat's sugar cooperative societies, directly benefiting more than two lakh farmers, as per the release.
Providing the background of this decision, the Minister stated that sugar societies across the country generally pay sugarcane farmers prices based on the FRP (Fair and Remunerative Price) fixed by the Government of India.
Gujarat's cooperative sugar societies have ensured that farmers receive maximum benefits not only from sugar production but also from the income generated through various by-products such as molasses, ethanol, and power generation through cogeneration. As a result, sugarcane farmers in Gujarat have consistently received higher prices compared to farmers in other states of the country.
Providing further details, the Cooperation Minister added that in the past, the Income Tax Department had treated the prices paid above the FRP as profit and issued tax demand notices to various sugar cooperative societies in Gujarat. Due to this complex issue related to the period from 2007-08 to 2014-15, Gujarat's sugar cooperative societies were facing a potential financial burden of nearly Rs. 1,500 crore.
After Prime Minister Narendra Modi established a separate Ministry of Cooperation, a historic and significant amendment was made in the provisions of the Income Tax Act in 2023 through the efforts of the Union Ministry of Cooperation under the leadership of Union Cooperation Minister Amit Shah. According to this amendment, a legal provision was introduced to recognise sugarcane prices approved by State Governments for Income Tax purposes.
Following this amendment made by the Union Ministry of Cooperation, Chief Minister Bhupendra Patel constituted a high-level committee at the State level to make recommendations on the matter. Responding positively to the report and recommendations submitted by this committee, the Gujarat Government has taken a revolutionary farmer-centric decision to officially approve the sugarcane prices paid by sugar cooperative societies to farmers during the period from 2007-08 to 2014-15, the Minister stated.
Expressing gratitude on behalf of sugar cooperative societies and farmers to the Prime Minister, the Union Cooperation Minister, and the Chief Minister for this decision, Minister Vaghani clarified that the State Government is fully committed to safeguarding the interests of the cooperative sector and farmers.
Gujarat's sugar cooperative societies are currently playing a significant role in the economic empowerment of farmers by making direct payments to more than two lakh sugarcane growers. This decision taken by the State Government will prove instrumental in further strengthening and enriching the foundation of the cooperative sector. (ANI)