Government plans to merge directorates of sugar and edible oils

The Directorate of Sugar lost much of its sheen as the government partially de-regulated the sector in 2013

In line with its policy of running a leaner administrative setup, the Narendra Modi government at the Centre plans to merge the Directorate of Sugar and the Directorate of Edible Oils in the food ministry. The move will effectively reverse a decision taken about 20 years ago.

According to officials in the know, the Directorate of Sugar and the Directorate of Edible Oils (also known as the Directorate of Vegetable Oils, Vanaspati and Fats), are perhaps the last standing vestiges of the pre-liberalisation days when controls and curbs were the order of day.

The Directorate of Sugar played an important part in policy formulation for the sugar sector till recently, but it lost much of its sheen as the government partially de-regulated the sector in 2013.

As part of that de-regulation exercise, the government stopped deciding the monthly sale quota for sugar mills and also ended the practice of purchasing a fixed quota of the sweetener annually from mills for distribution through the public distribution system.

The Directorate of Edible Oils had become defunct even earlier, when the import as well as export of edible oils was brought under the Open General Licence (OGL) in 1992.

Gradually, it also lost the powers to grant licence to produce, market, export, or import edible oils as the economy turned more open with less government interference. Both directorates were headed by chief directors.

"Almost 20 years ago, both these directorates were among the most powerful arms of the ministry of food and exercised considerable influence on the policy making. But over the years, these bodies lost much of their sheen and the last nail in the coffin was de-regulation of the sugar sector," said a senior official, who has been long associated with both the bodies.

He added that currently, the two directorates are only maintaining data on production and supplies of sugar and edible oils. The merged entity will continue to do this task.

"There is also a proposal to bring some work related to the Sugar Development Fund (SDF) into the revamped Directorate, but nothing has been finalised yet," said another official.

SDF is used to grant loans to sugar factories for modernisation and a host of other activities. It is maintained in the ministry of food and is collected from the excise duty on sugar.

Officials said although there is a proposal to merge the two directorates into one, there is no move to retrench any of the existing employees. The Directorate of Sugar employs 70-80 people, while there are only 10-20 in the Directorate of Edible Oils.

"In the case of the Directorate of Sugar, most of the staff are from technical background and sugar technologists from the National Sugar Institute (Kanpur), who were employed to inspect sugar factories, suggest measures to modernise and improve them, etc," said the official.

Many of the staff of the Directorate of Sugar currently operate from the Jamnagar House in New Delhi.