mumbai the state finance department has strongly opposed a proposal from another department to seek a rs 10235crore margin loan from the national cooperative development corporation ncdc on behalf of nine cooperative sugar factories controlled by bjp leaders it has pointed out that the bulk of the factories are lossmaking and the state could face a large financial burden if they cannot repay the loanthe factories are linked to senior bjp leaders including revenue minister radhakrishna vikhe patil junior railway minister at the centre raosaheb danve as well former ministers pankaja munde harshavardhan patil vijaysinh mohite patil and mp dhananjay mahadik see boxaccording to the rules once a loan is routed through the state government it has to repay the ncdc in annual instalments with interest the cooperative sugar factory on its part pays the state in annual instalments hence if the factories fail to pay on time the burden falls on the governmentthe proposal mooted by the state cooperation department was discussed in the last cabinet meeting but it did not reach any conclusion it is expected to come up again the planning department has also opposed the proposalthe finance department pointed out that seven of the nine sugar factories are making losses only six of the factories had the capacity to raise additional loans and seven of the factories still had government funds to returnthe finance department also said the sugar factories had earlier applied directly to the ncdc but were found to be ineligible now they are seeking to route their proposals through the state government it said no details had been provided on why they had been found ineligible for direct loansthe finance department has also pointed out that the ncdc was giving loans at a higher rate of interest than the open market while the ncdcs interest rate for loans was 93 the state had taken loans from the open market at 77 interestmoreover the finance department said in january the state had made a rule not to provide guarantees to cooperative sugar factories this proposal seemed to be going against that it addedin its response to the issues raised by the finance department the sugar commissionerate said the factories faced losses since poor rainfall had reduced output also both national and international conditions had led to a decline in sugar prices leading to a fall in output and rise in debtthe sugar commissionerate also responded to concerns on why the state should take on the financial responsibility it pointed out the cooperative sugar factories play an important role in the rural economy and the state should consider decisions to aid their revival on taking an ncdc loan at a higher interest rate than the open market the department said the interest rates were satisfactory when considered over a 10year span