The Congress-led UPA Government is widely expected to announce a significant relief package to support the crisis-ridden sugar industry.

The government has just convened a high-level meeting to discuss ways to support struggling sugar mills. A source said a relief package of up to Rs 50,000 crore could surface for discussion at the meeting on Wednesday.

The relief package could include interest-free loans for millers, and increase in import duty on sugar from the current 15 per cent to a whopping 50 per cent.

Uttar Pradesh (UP) and Maharashtra, the biggest sugar-producing states of India, have witnessed the failures of several sugar mills, mainly due to drastic increase in cost of production.

Millers across India owe nearly Rs 3,400 crore to farmers as a result of sugarcane they purchased from them in 2012.

Speaking on the condition of anonymity, a miller said, "We are in no position to pay a higher sugarcane price this year as our cash position is precarious due to drop in sugar rates both in the domestic and international markets."

He added that miller urgently needed to dispose 1.75 million tonnes of unsold sugar stocks, and only then they would be able to start crushing fresh crops.

While special advisory price that sugar mills have to pay to farmers has jumped by a whopping 70 per cent over the past few years, from Rs 165 per quintal to Rs 280 per quintal; price of sugar has been increased by merely 7-8 per cent.