Cotton mills across Maharashtra owe the government as much as Rs 1,700 crores. The government has recovered only Rs 73.61 crores of the Rs 1,748 crores that had been released towards share capital over the last two decades. Ironically most of the mills are under leaders from political parties.
Though 130 societies sought funding as share capital to set up the mills, 29 of them have gone for liquidation, while three have been shut down. Twenty four of them are still under construction, while only 34 of them are running. The government has failed to recover the dues due to the political patronage the mills enjoy. The mills are expected to start paying back as soon as production starts. To avoid repayment, some mills do not draw the last installment of government share. Some of them have recruited excessive manpower while in a few cases the management has paid an exorbitant price to make the business unfeasible.
The state government extends a share capital of 45 per cent to cotton mills set up on a cooperative basis by the board of directors in general categories. Given the state’s poor finances and ballooning debt, the government has now decided to review its norms for recovery of the dues.