Centre to cut levy quota on sugar to 10 per cent

The Centre will bring down levy obligation on the sugar industry from 20 to 10 per cent from October in anticipation of a bumper output, said a government release.

“We will take 10 per cent as levy sugar for 2010-11 season,” Food and Agriculture Minister Sharad Pawar said at the annual meeting of National Federation of Cooperative Sugar Factories.

The government had raised the percentage of levy sugar to 20 per cent in 2009-10 in the wake of low production. Under the current levy mechanism, sugar mills are required to sell 20 per cent of their produce to the Union government at Rs 1,800 a quintal (against an open market price of Rs 2,600-2,700 a quintal). This sugar is distributed to BPL families under the public distribution system (PDS).

India, the world’s second largest sugar producer, is expected to produce around 24 million tonnes of the sweetner in the next season, against 19.02 million tonnes in the previous year, according to government estimates.

The government requires 2.7 million tonnes of sugar for distribution through ration shops to families below the poverty line. The levy percentage of 10 per cent will be enough to meet the requirement for PDS considering the projected production for the next year.