New Delhi, Sep 26 (IANS): The Union Cabinet on Wednesday approved a comprehensive policy for the sugar industry, including a Rs 5,538 crore package, that seeks to offset the cost of cane and provide transport subsidy for sugar export to enable the industry improve its liquidity and clear arrears of cane growers.

Addressing the media here, Union Finance Minister Arun Jaitley said that the policy's objective is to deal with the surplus domestic stock of sugar due to higher production in the coming season.

"One of the points (of the policy) talks about providing assistance to sugar mills by defraying expenditure towards internal transport, freight handling and other charges to facilitate export during the sugar season (2018-19)," he said.

"Another one is to provide assistance to sugar mills at the rate of Rs 13.88 per quintal of cane crushed during the 2018-19 season to offset the cost of cane itself."

The transport subsidy will be Rs 1,000 per tonne of sugar for mills located within 100 km from ports, Rs 2,500 per tonne for mills located beyond 100 km from the ports in the coastal states and Rs 3,000 per tonnes for mills located in other than coastal states or actual expenditure, whichever is lower.