SDF, managed by the food ministry, is used for lending money to mills at lower interest rates. Till last fiscal year, the cess - collected from sugar mills - was deposited in it. When GST kicked in, the sugar cess was scrapped and hence a separate budgetary provision of Rs 496 crore was made for SDF for 2017-18.
"Most of the fund allocated for this fiscal under SDF has been utilised. There is a possibility that the budgetary allocation for SDF increase marginally to Rs 500 crore for the next fiscal," sources said.
It is a revolving fund. If sugar mills clear the loan, the same fund will be used for further lending else the availability of funds will be less, the sources said.
In recent years, SDF has been used to finance various interventions of the government to deal with the crisis in sugar industry.
Industry body ISMA has revised its sugar production estimate for the 2017-18 season (October-September) to around 261 lakh tonnes, against the first advance estimate of 251 lakh tonnes.