Decision on sugar decontrol likely in 15 days: Thomas

February 15, 2013 02:07 pm | Updated 02:07 pm IST - New Delhi

The Centre is likely to take a decision on giving freedom to the Rs. 80,000 crore sugar industry to sell the sweetener in the open market in the next 15 days, Food Minister K.V. Thomas on Friday said.

In October last year, the expert panel headed by PMEAC chairman C. Rangarajan had recommended immediate removal of two major controls — regulated release mechanism and levy sugar obligation — and other restrictions gradually.

“Our sugar position is comfortable this year. The Rangarajan committee’s recommendations are before the Department. I believe in the next 15 days, we will be able to take a decision on the entire issues like levy sugar, release mechanism and others,” Mr. Thomas said at an Assocham event.

The minister assured that the Rangarajan committee’s recommendations will not see the plight of other panels’ suggestions which have not yet been implemented.

He also said the Food Ministry is seeking views of various ministries on the panel’s recommendations and a Cabinet note will be moved shortly.

According to sources, about 10 states have given their views on the panel’s suggestions on sugar decontrol. However, the two major sugar producing states — Uttar Pradesh and Maharashtra — have not yet responded.

At present, sugar sector is controlled right from production through distribution. Through the release mechanism, the Centre fixes the sugar quota that can be sold in the open market. Under the levy system, it asks mills to contribute 10 per cent of output to run ration shops costing the industry Rs 3,000 crore a year.

Currently, the Centre buys sugar from mills at about Rs 20 per kg and sells to ration card holders at Rs 13.50 per kg.

On removal of quota allocation for sugar sale in the open market, Thomas said: “We have moved to four-monthly mechanism. There is no problem in removing this system.”

The removal of release mechanism would help mills manage inventories and cash-flows better, while abolition of levy sugar system would result in saving of Rs 3,000 crore annually that it currently incurs on selling cheaper sugar to the Centre for running PDS.

Barring two key regulations with respect to fixing sugarcane price and sharing of 70 per cent revenue by sugar firms with farmers, the Rangarajan report has suggested giving freedom to mills to sell sugar in the open market and having a stable export and import policy.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.