CURBS ON SUGAR LIFTED, SUB­SIDY LIKELY TO GO UP

Hindustan Times ST (Mumbai) - HT Navi Mumbai Live - - NAVI MUMBAI - HT Cor­re­spon­dent let­[email protected]­dus­tan­times.com

NEW DELHI: The government has lifted key re­stric­tions on how sugar is sold, dis­man­tling one of the last ves­tiges of the ‘li­cenceraj’ era, long over­due and blamed for hurt­ing cane farm­ers, millers and con­sumers alike.

Sugar is a glob­ally con­trolled com­mod­ity but In­dia, the world's sec­ond-largest pro­ducer, reg­u­lates it the most. The cab­i­net on Thurs­day abol­ished a rule that makes it manda­tory for mills to sell 10% out­put to the government at be­low-mar­ket prices so that this could be sup­plied to the poor, termed ‘levy sugar’. The move will help avoid sharp swings in re­tail prices and sta­bilise pro­duc­tion, ac­cord­ing to a panel that rec­om­mended lift­ing of the curbs.

It is in step with a key rec­om­men­da­tion of a com­mit­tee set up by the Prime Min­is­ter and led by Chakravart­hi Ran­gara­jan, the PM’s eco­nomic ad­vi­sory coun­cil chief.

Levy sugar sales of­ten hurt millers' prof­itabil­ity, mak­ing them un­able to pay farm­ers on time. The sugar in­dus­try owes nearly R5,490 crore in pay­ment ar­rears to farm­ers, which of­ten prompts cane grow­ers to shift to other crops ev­ery two years or so. This leads to oc­ca­sional short­fall in sugar out­put, push­ing up con­sumer prices and a glut- deficit cy­cle.

CON­TIN­UED ON P10

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