Govt Yet To Clarify Sugar Delicensing

The confusion over continuation of the incentives scheme for new sugar factories continues, even as the industry ministry yesterday issued a formal notification for the delicensing of sugar industry. The press note, issued by the department of industrial policy and promotion, talks only about deleting sugar industry from the list of industries requiring compulsory licensing under the provisions of the Industries (Development and Regulation) Act, 1951. It does not mention the incentives the new mills are entitled to at present.

The confusion was created by agriculture minister Som Pal's statement while announcing the Cabinet's decision on sugar delicensing that the new units coming up after delicensing would not be entitled for the incentives like freedom from compulsory 40 per cent levy and other fiscal sops. However, those already enjoying these facilities would continue to do so, he had stated.

The sugar department in the food ministry, which administers the incentives scheme, is yet to take a final decision on this issue. While logically a delicensed industry should not be entitled to such sops, a section of policy makers and sugar industry feels that discontinuation of the incentives would make fresh investment in this sector unattractive. Food ministry has been waiting for decision on the delicensing to be formally notified before finalising its views on the incentives.

The industry ministry's notification categorically states that a minimum distance of 15 kms would continue to be observed between an existing sugar mill and a new mill by exercise of powers under the Sugarcane Control Order, 1966. The notification says that the entrepreneurs wishing to avail of delicensing would be required to file an industrial entrepreneur memoranda (IEM) with the secretariat of Industrial Assistance in the industry ministry.

Those already issued letters of intent (LOI) for manufacturing sugar need not file this IEM now. They would, however, have to file Part B of the IEM at the time of commencement of commercial production, it says.