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Panel wants India sugar industry to flourish like in Brazil

Last Updated: Monday, February 27, 2012 - 21:33

New Delhi: The sugar industry seems to have found support from two key members of the high-level committee on the issue of decontrol in the sector with latter saying other nations have benefited from removal of government controls.

The members of the expert committee, appointed by Prime Minister Manmohan Singh, said the true potential of the sugar industry has not been fully tapped and indicated submitting a "serious" report with positive outlook in the next six months to make the sector flourish like in Brazil.

"We are serious about this (sugar decontrol). Many countries like Brazil have really flourished and we want this to happen in India," said committee member Kaushik Basu, who is also Chief Economic Advisor to the Finance Ministry.

He said that the committee's "shared feeling is that potential of this sector has not been realised in India. We will write serious report. I am keeping my fingers crossed, things will happen".

In January, the government had constituted an expert committee, under the chairmanship of C Rangarajan to examine issues related to decontrolling of the sugar sector.

Rangarajan, who is also the chairman of the Prime Minister's Economic Advisory Council (PMEAC), said a report is expected to be finalised in the next six months.

"I think we are meeting after one month again. In the next six months, we hope to submit the report. This is a preliminary meeting and we discussed various issues facing sugar sector," he said.

Rangarajan said the Committee has outlined various issues to proceed further relating to the sugar industry. It will also look into the implications of these issues.

Asked if the panel will submit a positive report, he said, "Well, the idea of setting up a committee is to have a positive outlook".

Apart from Rangarajan and Basu, the members of the committee include secretaries to the Department of Food and Agriculture, Chairman of Agricultural Costs and Prices (CACP), Ashok Gulati, and former Agriculture Secretary Nand Kumar.

The apex sugar industry bodies ISMA and NFCSF are seeking partial decontrol of the sector and freedom to sell the entire stock in the open market.

At present, under the levy obligation, sugar mills are required to sell 10 percent of their output to the government at below cost rates for supply to ration shops. Mills supply levy sugar at 60 percent 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 is estimated to touch 26 million tonnes as against the annual demand of 22 million tonnes.


First Published: Monday, February 27, 2012 - 15:01
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