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| Centre to take views of states on decontrol of sugar sector |
| Press Trust of India / New Delhi Sep 07, 2010, 17:40 IST |
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 The Centre has decided to take views of the state governments before taking a final call on the decontrol of the sugar industry.
This was the outcome of high-level meeting on decontrol of the sugar sector last week and it included Prime Minister Manmohan Singh, Finance Minister Pranab Mukherjee, Food Minister Sharad Pawar and Planning Commission Deputy Chairman Montek Singh Ahluwalia, according to sources.
It was felt in the meeting that "there was utmost need to take views from the states as they play key role in administering cane area as well as in distribution of sugar through ration shops," a source said, adding that consultation would be undertaken with all States and not only from sugar producing states.
During the meeting, Pawar had made a presentation where the food ministry proposed to do away with various controls, such as giving freedom to mills for sale of sugar in the open market.
It also suggested that the Centre should buy sugar from open market for supply through ration shops. Sources said, however, that concerns were raised that the move might lead to increase in the food subsidy bill.
In the presentation, the ministry had suggested decontrol from October, which is the start of a new sugar season.
Sources said the plan to decontrol the sugar sector might get delayed as the consultation with states would take time.
The Food Ministry has decided to consider decontrol of the sector on the expectations of bumper sugar crop of 25-26 million tonnes in 2010-11 season starting next month.
Besides, sugar prices have also come down by almost 40 per cent to Rs 30 a kg now from nearly Rs 50 a kg in mid-January.
At present, the sugar sector is under government controls from production till distribution.
The Centre fixes the quantity of sugar that mills can sell in the open market as well as through ration shops. Also, the mills are obligated to sell 20 per cent of their produce to the government for supply through ration shops. It also fixes the minimum support price of sugarcane for farmers.
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