PMEAC likely to finalise report on sugar decontrol in 6 months

An expert committee on sugar decontrol, headed by PMEAC Chairman C Rangarajan, is expected to submit its report in next six months, Food Minister K V Thomas said today.

"I recently met the Prime Minister Economic Advisory Council (PMEAC) Chairman and requested him to submit the report within six months," the minister told reporters on the sidelines of a conference here.

On January 27, Prime Minister Manmohan Singh constituted an expert committee under the chairmanship of C Rangarajan to examine issues related to decontrolling the sugar sector.

The members of the committee include Kaushik Basu, Chief Economic Adviser, Ministry of Finance, and secretaries to the Department of Food and Agriculture.

Other members of the panel are: Commission for Agricultural Costs and Prices (CACP) Chairman Ashok Gulati, former Agriculture Secretary Nand Kumar and K P Krishnan, Secretary EAC Convener.

The sugar industry is under government control, right from the level of production to distribution.

In early January, the representatives of the apex sugar industry bodies ISMA and NFCSF had met Finance Minister Pranab Mukherjee, 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% of their output to the government at below- cost rates for supply to ration shops.    

Mills supply levy sugar at 60% of the cost of production, resulting in an annual industry loss of about Rs 2,500-3,000 crore. 

Industry has also been demanding removal of the monthly release system under which 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 as against the annual demand of 22 million tonnes.