The Sugar Development Fund Act, 1982

As the name suggests the Sugar Development Fund Act, 1982 was enacted to provide a provision of fund or finance for the development and related activities of the sugar industry in India.  

Section 1 and 2 provides the short title and definitions related to the Act. This Act applies to whole of India. For instance, per the definition, a ‘Committee’ is constituted for the purpose of speedy consideration and disposal of applications related to loans/grants for facilitating the rehabilitation and modernisation of any sugar factory or for development of sugarcane in an area. 

Section 3 talks about the formation of the fund called the ‘Sugar Development Fund’ under this Act. The amount to be credited in this fund = excise duty levied & collected – the collection cost + any money (after due appropriation) received by the Central Government for the purposes of this Act  

 Section 4 states the various applications of this fund by the Central Government: 

  • Making loans for upgradation or expansion of processes, modernization and improving viability of the Sugar Industry in India. 
  • Making grants for research and development for Sugar Industry. 
  • Any other expenditure related to this Act. 

Section 5 says that every application for the loan or grant (as mentioned in section 4), should apply to the Committee in a prescribed manner. 

Section 6 elaborates on the formation and role of the Committee mentioned in the previous section.  

Section 7 states that an annual report should be prepared with all the details of activities financed during a specific financial year along with provision of account statements for the specific financial year. 

Section 8 mandates the occupier (one having ultimate control over the affairs of a sugar factory) of the sugar factory (in question) to collect, record and present information (statistical or other information) related to this Act to the Central government for a particular financial year.  

Section 9 enlists the power of the Central Government to make rules pertaining to the provision of this Act. The rules may relate to: 

  • The manner, terms and conditions subject to loans and grants and application procedure for the same. 
  • The Committee composition; its procedures and functions.  
  • Any other matter related to the Act. 

The Sugar Development Fund rules, 1983

The Sugar Development Fund Rules were introduced by the Central government to exercise the powers as per Sugar Development Fund Act, 1982.  

Section 2 specifies important definitions under the Rules such as, ‘Account Officer’, Sugar factory’, ‘Sugar year’, ‘Cess’, ‘Financial institution’, etc. Sugar year is defined as a one-year span starting from first day of October in present year and ending on last day of September the next year. The term ‘Financial institution’ includes the ‘Industrial Finance Corporation of India’, ‘The Industrial Development Bank of India’, or the ‘Industrial Credit and Investment Corporation of India Limited’.  

Section 3 (in Chapter 2) outlines the process in relation to maintenance of accounts and credit to the Fund by creating necessary demands for Grants formulated by the Central government and the amount received from loan repayment, interest etc. 

Section 4 specifies the duty of the Accounts Officer to maintain accounts of the Fund. 

Section 5 clarifies that the Accounting of Funds would be based under a major head of ‘Development and Welfare Fund’ and minor head of ‘Sugar Development Fund’. 

Section 6 talks about the formation of a Standing Committee, immediately after enforcement of these Rules, which would comprise of Directors and Secretaries from various ministries and departments of Government of India like Department of Food and Public Distribution, Ministry of Finance etc.  

Section 7 extends the functions of the Standing Committee: 

  • Consider applications received for various purposes such as assistance in payment of loans, grants etc. 
  • Other functions based on the Act, which may be decided by the Central government from time to time.  

Section 8 mentions that for minimum the committee must meet once in a quarter and there is no upper limit to the number of meetings that could be done.  

Section 9 specifies the constitution of the Quorum to be 05 members in case of Committee and 03 members in case of sub-committee.  

Section 10 talks about the role of Chairman as the main conveyor of the meetings and members may collectively appoint another person to precede the meeting in case of his absence. 

Section 11 extends the power of the Chairman or the conveyor to call for meetings as and when needed.  

Section 14 mentions that the final decision of the committee would be decided by the voting system where the majority would win. No proxy voting is allowed. In case of tie between votes, the Chairman or the conveyor shall take the casting vote. 

Section 17 talks about the sanction of loan payment after considering the recommendations of te committee for the purpose of: 

  • Setup of heat treatment plants and irrigation schemes 
  • Rearing of nurseries 
  • Pest control measures 
  • Cultivation incentive for shifting to improved sugarcane varieties 

Section 18 talks about the authorization of grants payment for establishment of research institutes aimed at development and promotion of sugar and its aspects. This shall be done after consultation with the committee.  

Section 20 says that the government may defray expenditure involved in the internal transportation of and freight charges for promoting the export of sugar. This may be done after consultation with the committee and considering factors like the stock of sugar in factories, its requirement in the country, domestic and international prices, and other similar factors.  

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