The Maharashtra government’s decision to sanction Rs 36.4 crore for Nilkanth Cooperative Spinning Mill in Akola, whose vice-chairman is BJP Akola East MLA Randhir Savarkar, has raised eyebrows not just for the fact that this was done despite objections by the Ajit Pawar-helmed Finance Ministry. It also went against the existing state policy requiring assistance to closed mills.
Savarkar has hailed the Cabinet’s approval, saying government assistance was crucial for the revival of cotton mills. “Cotton farmers who were forced to sell their produce to spinning mills in Tamil Nadu will now sell it within the state,” he said.
- What were the Finance Ministry’s objections?
A Finance Ministry official pointed out that the policy to provide shared capital does not apply to closed mills, and treating Nilkanth Spinning Mill as a “special case” was a violation of norms.
“Once you grant funds for a special case, similar proposals will be submitted. Each will cite farmer issues or regional backwardness. The government will either have to heed all such cases or tweak its policy to accommodate political considerations. However, the core issue is fiscal discipline, especially when the department is stretched with a Rs 9.8 lakh crore debt and populist schemes,” the official said.
- Is this a one-off relaxation?
In May, the Devendra Fadnavis Cabinet had approved a Rs 403 crore loan from National Cooperative Development Corporation (NCDC) to Bhor-based Rajgad Cooperative Sugar Factory.
The decision was widely seen as the BJP accommodating former Congress MLA Sangram Thopte, who had crossed over to the BJP and controlled the factory. It had then, too, prompted a sharp response from Ajit Pawar.
- What has the government said?
The government has defended the move as one aimed at supporting farmers and creating jobs. A senior minister, requesting anonymity, said, “The Finance Ministry always raises objections citing rules and regulations whenever such a proposal is placed before it. While the reasons are valid, the government needs to consider multiple aspects. The funds will help revive the (Akola) mill and will hugely benefit cotton farmers in western Vidarbha.”
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Vidarbha’s farmers produce nearly 30% of India’s cotton, and the Cabinet decision is also being viewed as an attempt to quell discontent after the Centre in August reduced import duty on cotton till December.
- What is the history of the Nilkanth mill?
The mill was set up in 1965 by former minister of state Nilkanth Sapkal and began operations in 1970. It shut down in 2008 citing “technical reasons”. Insiders, however, point to delayed wages, mounting losses, union protests, and high operating costs as reasons.
“Though the mill is spread across 150 acres, the management was unwilling to monetise the land and instead sought funds to sustain operations,” a source said.
In 2014, after the BJP came to power in Maharashtra, Savarkar first took up the matter, raising it with then Cooperatives Minister Chandrakant Patil and Textiles Minister Sanjay Savkare. The government at the time proposed a 50:45:5 formula to revive the mill (where the state arranges 50% of the amount needed as loan, provides 45% of the total funds needed, and allows the mill promoter to put in just 5% investment as seed capital). The proposal never saw the light of day.
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However the assistance to the Nilkant mill now has been cleared as per the same formula.
Seen as close to Chief Minister Devendra Fadnavis, 52-year-old Savarkar is a three-time MLA from Akola East. He began as a student leader raising farmer issues, and went on to be associated with Raju Shetti’s Swabhimani Shetkari Sanghatana before joining the BJP in the late 1990s.
He rose through the BJP ranks as district chief and state general secretary, and won his first Assembly election in 2014 from Akola West. He has retained the seat since. In February 2024, he was made the BJP’s chief whip in the Assembly.
Since Savarkar has often raised the plight of Vidarbha’s farmers, aid to his mill also helps his political clause.
