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An expert committee on sugar decontrol is likely to submit its report in the next six months, the Prime Minister’s economic advisory panel Chairman, Dr C. Rangarajan, has said.
In January, the Prime Minister, Dr Manmohan Singh, had formed an expert committee, under the chairmanship of Dr C. Rangarajan, to examine the issues related to decontrolling of the sugar sector.
“I think we are meeting after one month again. In the next six months, we hope to submit the report. This is a preliminary meeting, we discussed various issues facing sugar sector,” Dr Rangarajan told reporters today after the meeting.
On the deliberation in the meeting, Dr Kaushik Basu, Chief Economic Advisor, Ministry of Finance, said: “We are serious about this (sugar decontrol). Many countries like Brazil have really flourished and we want this to happen in India.’’
Apart from Dr Rangarajan and Dr Kaushik Basu, members of the committee include secretaries to the Department of Food and Agriculture, Agricultural Costs and Prices (CACP) Chairman, Mr Ashok Gulati, former Agriculture Secretary, Mr Nand Kumar, and the EAC Secretary, Mr K.P. Krishnan.
“Shared feeling is that potential of this sector has not been realised in India. We will write serious report. I am keeping my fingers crossed, things will happen,” Dr Basu noted.
The sugar industry is under government control, right from the level of production to distribution. Apex sugar industry bodies ISMA and NFCSF are seeking partial decontrol of the sector, including freedom to sell sugar in the open market and doing away with the levy obligation for Public Distribution System.
Under the levy obligation, sugar mills are required to sell 10 per cent of their output to the government at below-cost rates for supply to ration shops. Mills supply levy sugar at 60 per cent of the cost of production, resulting in an annual industry loss of about Rs 2,500-3,000 crore.
The industry has also been demanding removal of the monthly release system under which the Food Ministry allocates quantity of sugar to be sold in the open market every month.
Sugar production in India, the world’s second largest producer but the largest consumer, is estimated to touch 26 million tonnes against the annual demand of 22 mt.
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