The government on Wednesday allowed import of refined sugar at zero duty up to December 31 2010, in the wake of sweetener prices nearing Rs. 50 a kg in the retail market.
The Cabinet Committee on Prices (CCP) also decided to permit UP mills to process imported raw sugar outside the State due to restrictions there.
Two-three million tonnes of wheat would be released in the open market in the next two months to check prices, Agriculture Minister Sharad Pawar told reporters after the meeting.
Import of white sugar was allowed till March 31 this year earlier.
Expecting States to play more active role in containing rising food prices, Prime Minister Manmohan Singh will review the situation with the Chief Ministers later this month.
Food inflation has reached near 20 per cent while sugar is inching near Rs. 50 a kg in the retail market.
The Prime Minister would also review the implementation of the Essential Commodities Act for reining in the food prices, Pawar said.
The Mayawati government does not allow the mills to process the imported raw sugar in Uttar Pradesh despite repeated requests from the Centre.
Pawar said as UP has not allowed processing of imported raw sugar, the government has relaxed the Central excise duty rules enabling the mills to carry out refining elsewhere.
Nearly nine lakh tonnes of imported raw sugar are lying at Kandla and Mundra ports following the restrictions imposed by the UP government in November 2009.
This apart, several state governments have been advised not to impose value added tax (VAT) on imported sugar. They have also been asked to take stringent measures to check hoarding and black-marketing.
The Centre may increase the subsidy on imported edible oil from the prevailing rate of Rs. 15 a kg. The subsidy scheme for public distribution of imported edible oil under the states will continue till October 31, 2010. It was to earlier lapse on March 31.
Cooperative major Nafed and the National Consumer Cooperative Federation (NCCF) will be authorised to distribute subsidised imported oil and pulses in states that are not implementing the scheme.