The Sugar Dance

On their borrowings the sugar mills are supposed to pay 18-20 per cent interest. To enable them to pay it, the government must ensure that sugar prices rise that much. Hence manipulation of sugar releases to raise prices is part of the game. Games such as Kalpnath Rai played last year, which led to his fall, are unavoidable.

The food supplies minister has another string to pull the price of levy sugar, which is based on the statutory minimum price (SMP) of sugar. All he has to do is to delay announcing the SMP, so that the levy price also cannot be determined. And a price that is not fixed cannot be paid. So the central government picks up sugar for the public distribution system without having to pay for it. Representatives of the sugar mills then chase the minister of food supplies to fix the levy sugar price. On the other side they press the Reserve Bank to give them credit against supplies to the public distribution system.

 

Such are the sordid games played in the name of the poor. The subsidy conveyed to beneficiaries of the public distribution system is barely Rs 5-10 a month. But in the process of conveying this measly sum, ministers, officials, bankers and sugar mills stage a dance that vexes many and makes some rich. Why must this continue?