Levy Sugar Price Hike Deferred

The politically inconvenient decision on hiking the price of levy sugar for the public distribution system was again deferred by the Union cabinet yesterday till the Punjab elections are over.

The price hike had been taken by the cabinet even earlier but a decision kept in abeyance every time on one pretext or another. Even the steering committe of the ruling United Front, which was asked by the cabinet on January 15 to look into this issue, had failed to take a concrete decision on the food ministrys proposal to increase the levy sugar price by Rs 1.60 a kg.

The cabinet yesterday decided to keep the matter pending till the elections in Punjab and by-elections in several other states are over. The delay in increasing the levy sugar price has meant mounting sugar subsidies, with the additional burden estimated at around Rs 60 crores per month. Already, the government owes over Rs 360 crore as subsidy payment to the Food Corporation of India (FCI), which handles levy sugar for the public distribution system.

There is no unanimity in the cabinet or the United Front steering committee on this issue. Agriculture minister Chaturanan Mishra has been opposing price hike move, maintaining that other means were available for reducing the subsidy burden wiothout increasing the hardships of the common man.

The increase in overall price index due to Rs 1.60 hike in sugar prices would be 0.1 per cent.