Pralhad Joshi accuses Siddaramaiah govt of 'squeezing productive sectors'

New Delhi, Nov 13 (PTI) Union Food and Consumer Affairs Minister Pralhad Joshi has accused the Karnataka government of financially "squeezing productive sectors" while funding guarantee schemes, in a strongly-worded letter to Chief Minister Siddaramaiah.

The letter, dated November 12, released after farmer protests over delayed cane payments ended, rejected allegations that the Centre was "evading the core issue" of farmer welfare. Instead, Joshi pointed to "arbitrary cost escalations" imposed by the state government on sugar mills that have "crippled sugar factories' viability".

Joshi defended the Centre's Fair and Remunerative Price (FRP) of Rs 355 per quintal for 2025-26, stating it provides a margin of "over 105 per cent on the cost of production - an unprecedented level of farmer protection".

Crucially, while states are free to declare a higher State Advised Price (SAP), Karnataka has not done so, leading to "farmer grievances that are being unfairly attributed to the Centre".

The Minister highlighted the Ethanol Blending Programme, noting that since 2013-14, distilleries have generated over Rs 2.18 lakh crore in revenue.

Karnataka-based distilleries alone supplied 139.8 crore litres of ethanol during 2024-25, with an allocation of 133.9 crore litres for 2025-26. This has enabled mills to clear dues promptly and provided income stability to farmers, he said.

Joshi targeted Karnataka's fiscal measures, which he said have "exacerbated the distress of both sugar factories and farmers".

The state increased the annual Water Supply and Lifting Charges for sugar factories from Rs 5 lakh to Rs 1 crore, imposed an Energy Cess of 60 paise per unit, hiked VAT on diesel by nearly 50 per cent (yielding Rs 7,000-7,500 crore in additional revenue), and added a 3 per cent road tax on new commercial vehicles.

Two major fuel price hikes in three years escalated transportation costs from Rs 500-550 per tonne to Rs 750-900 per tonne. Electricity tariffs also rose 70 paise per unit in April 2023 and a 36 paise surcharge in April 2025.

Joshi said that Maharashtra executed its last power purchase agreement (PPA) in April 2025, while Karnataka's last PPAs were in 2017-18.

"The absence of new PPAs in Karnataka has deprived its sugar factories of a stable revenue stream," he stated.

The Minister questioned the state government's response time, noting that "from the beginning of the recent agitation until the eighth day, no Minister from the Karnataka State Government even engaged with the agitating farmers." He contrasted this with the Centre's record, stating that "cane arrears across the country remain at historically low levels, even with a consistent annual increase in the FRP." Joshi said the Central government remains "deeply committed to the welfare of farmers, to ensuring the stability of the sugar sector, and to advancing policies that create long-term sustainability and prosperity - not short-term populism." PTI LUX CS SHW