State Government Share Capital Contribution to Co-operative Sugar Factories (Normal Area) (Tribal Area)

What is the State Government Share Capital Contribution to Co-operative Sugar Factories?

State Government Share Capital Contribution to Co-operative Sugar Factories is a scheme of the Agriculture, Farmers Welfare and Co-operation Department, Government of Gujarat, implemented by the Director of Sugar from Dr. Jivraj Mehta Bhavan, Gandhinagar. Under the scheme the state government subscribes to the share capital of a newly established co-operative sugar factory, on the basis of 30% of the project cost.

The stated objective on the Director of Sugar's scheme page is direct: to contribute state government share capital to set up new sugar factories in the co-operative sector. The scheme is listed in both a normal area and a tribal area version, which is how the department's budget provisions are organised, and the published standard of assistance to 30% of project cost, is stated once for the scheme as a whole.

This is an equity contribution, not a grant to individuals. The state becomes a shareholder in the society alongside the farmer members, which is what allows a new factory to close the gap between member share capital and the term loan a bank will sanction.

Why the scheme matters for Gujarat's sugar sector

The sugar industry is India's largest agro-based industry, and the Director of Sugar notes that national sugar production is the second highest in the world. Gujarat's position is distinctive: the department records 15 sugar factories in the state with a combined crushing capacity of 65,000 tonnes per day, and states that the sector is 100% operated by the co-operative sector in Gujarat.

That structure explains the design of this scheme. A co-operative sugar factory is owned by its cane-growing members, who typically cannot raise the equity a greenfield crushing plant needs. A new mill needs land, civil construction, boilers, mills, a co-generation set-up and working capital before its first season. Share capital contribution by the state fills the equity gap so the project can reach bankable gearing, and it is why the sanctioned project loan document is one of the four papers the Director of Sugar asks for.

Who is eligible, and who is not eligible?

Who is eligible

• Newly established sugar co-operative factories, that is, sugar co-operative societies setting up a new factory in Gujarat, as stated in the eligibility criteria published by the Director of Sugar.
• Societies that can show a project report, member share capital already collected, a sanctioned project loan, and ownership of the project land.
• Societies in both normal areas and tribal areas of the state, the scheme being notified for both.

Who cannot apply or is not eligible

• Individual farmers, cane growers, workers or households. There is no personal benefit and no citizen application form under this scheme. Individual growers gain only indirectly, as members of the society whose factory is capitalised.
• Private-sector or company-owned sugar mills. The scheme is confined to the co-operative sector, consistent with the department's record that Gujarat's sugar sector is entirely co-operative.
• Existing factories seeking working capital or loss funding. The stated objective is to help set up new sugar factories; the Director of Sugar runs separate schemes for that need, including interest subvention against long-term loans to co-operative sugar societies, and a package for strengthening sugar co-operatives as decided by the state government.
• Societies without ownership documents for the project land, or without a sanctioned project loan, since both are listed documents.

How much does the state contribute?

The department's own remarks column states that the contribution is made to the extent of 30% of the project cost to the eligible sugar co-operative societies. No separate rupee ceiling is published on the scheme page, because the amount follows the appraised project cost of each factory.

Because this is share capital and not a grant, the contribution sits on the society's balance sheet as state-held equity. Anyone preparing a proposal should read the governing resolutions for the terms attached to that equity, including any provision on redemption of the state's shares.

Which government resolutions govern the scheme?

The Director of Sugar publishes four resolutions with the scheme, and they are the primary documents to read before drafting a proposal:

1. Agriculture and Co-operation Department Resolution No. CSK/SCP/1797/238/(34)-GH dated 27 August 1997.
2. Agriculture and Co-operation Department Resolution No. CSK/3684/8226/89/GH-II dated 5 August 1998.
3. Agriculture and Co-operation Department Resolution No. CSK/MIS/3684/8226/(89)/GH dated 13 November 1998.
4. Agriculture, Farmer Welfare and Co-operation Department Resolution No. CSK/102022/1339/KH dated 18 April 2023.

The 2023 resolution is the most recent and should be treated as the operative one where it differs from the earlier three. All four are downloadable from the scheme detail page on the Director of Sugar's site.

How to apply for the share capital contribution

1. Prepare the project report for the sugar co-operative factory, covering both construction and machinery. This is the first document the Director of Sugar lists.
2. Collect and document member share capital. Compile the share capital raised from members, and attach the society's last balance sheet.
3. Obtain the project loan sanction. Secure the term loan for the project and keep the official sanction papers, which must be submitted with the proposal.
4. Establish land ownership. Assemble the official documents proving that the society owns the land for the proposed project.
5. Route the proposal through the District Registrar. The eligible sugar co-operative society sends the proposal through the District Registrar of the concerned district — not directly, to the Director of Sugar, Gujarat State, Gandhinagar.
6. Follow up with the Director of Sugar's office for scrutiny and sanction. The office is at Dr. Jivraj Mehta Bhavan, Block No. 8, 2nd Floor, Gandhinagar.

There is no online application portal published for this scheme. Everything moves on paper through the district co-operative machinery, which is also why the society's registration standing with the Registrar of Co-operative Societies has to be current.

What usually delays or blocks a proposal

• Land ownership not in the society's name, or the title not clear in the official documents.
• Project loan not yet sanctioned, which leaves the financing plan incomplete.
• Member share capital not actually collected, as opposed to promised. The scheme asks for the amount collected, with the balance sheet as proof.
• Balance sheet not up to date, since the last balance sheet is a listed document.
• Proposal sent directly to Gandhinagar instead of through the District Registrar, which is the prescribed route.
• Project report that does not separate construction from machinery, making project cost hard to appraise for the 30% calculation.

Where to get help and raise a grievance

The implementing office is the Director of Sugar, Dr. Jivraj Mehta Bhavan, Block No. 8, 2nd Floor, Gandhinagar, telephone 232-53435, email directorsugar@gmail.com. Scheme details, the governing resolutions and notifications are published at agri.gujarat.gov.in/dos.

Locally, the District Registrar of Co-operative Societies is both the routing authority for the proposal and the first place to take a query about the status of a pending file. The wider Registrar of Co-operative Societies office under the Agriculture, Farmers Welfare and Co-operation Department handles issues about the society's registration, audit and governance that can hold up a share capital proposal.

No fee is charged for submitting a proposal, and no intermediary can secure a sanction. The decision rests with the Agriculture, Farmers Welfare and Co-operation Department on the Director of Sugar's recommendation.