EGoM to mull import duty on white sugar in next meet

An Empowered Group of Ministers (EGoM) on Food is scheduled to meet on July 26 to consider imposing import duty on refined sugar and the sale of an additional 30 lakh tonnes of wheat and rice through ration shops.

The EGoM, headed by Finance Minister Pranab Mukherjee, will consider the Food Ministry's proposal to impose 15-20 per cent import duty on refined (white) sugar, sources said.

In the last meeting, the ministerial panel had deferred a decision on imposition of duty due to soaring food inflation, which is still high at 12.81 per cent.

The sugar industry had been demanding an import duty on white sugar to protect local mills from sliding prices. Sugar prices have declined sharply to Rs 30 a kg in the retail market of the national capital from Rs 48 a kg in mid-January.

Sources said the EGoM will also discuss a proposal to increase the price of sugar sold through ration shops, as the government has increased the levy price (the price it pays to mills to buy sugar) by around Rs 4 a kg.

While the issue price is Rs 13.5 per kg, the levy price has been fixed at an average of Rs 17.57 a kg. The gap between the levy price and the issue price will result in a subsidy of over Rs 1,000 crore.

The panel is also likely to consider increasing the CIP (central issue price) of wheat and rice supplied to families above the poverty line (APL) through the public distribution system.

APL families get wheat at Rs 6.10 per kg and rice at Rs 8.30 a kg.

Food and Agriculture Minister Sharad Pawar said yesterday that the Centre plans to sell an additional 25-30 lakh tonnes of wheat and rice through ration shops at cheaper rates.

"I am going to the EGoM to discuss about offering 25-30 lakh tonnes of rice and wheat to the state government for supply under PDS. This will be over and above the existing allocation," Pawar had said, adding that states have been demanding an increase in foodgrains allocation.

Food Corporation of India, the nodal agency for procurement and distribution of foodgrains, has nearly 60 million tonnes of wheat and rice in its buffer stock and the agency is facing a space crunch.

In May this year, the Centre had announced the sale of an additional 30 lakh tonnes of wheat and rice through ration shops during the June-November period at Rs 8.42 and Rs 11.85 per kg, respectively.

Although the rates for the additional foodgrains were far below the acquisition cost, they were slightly more than what BPL and APL families pay for their regular quota. BPL families get wheat at Rs 4.15 per kg and rice at Rs 5.65 per kg under the regular quota. At present, BPL families get 35 kg of rice and wheat every month, while APL households can avail 10 kg on an average.