Indian sugar mills association

Sweet nothings: Centre’s move to decontrol sugar leaves Delhi bitter

Date:	06 Jun 2013

Source:	The Millennium Post

Reporter:	Roushan Ali

News ID:	2319

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6 June 2013, New Delhi, Worried that Union’s move could provide good poll plank to Opposition, state lodges complaint. Delhi Government is worried that the taste of its cuppa ahead of the Assembly polls could turn bitter as the Centre has decided to partially decontrol the sugar sector. Claiming that the move to remove levy obligation on sugar mills and decontrolling the regulated release mechanism will adversely impact supply of sugar, the Delhi government has lodged a protest with the Centre. The Centre, well-placed sources in Delhi government said, failed to release to Delhi the quota of sugar for the month of May causing much discontent among nearly five lakh below poverty line (BPL) ration card holders and Antyodaya scheme beneficiaries. With the Assembly elections knocking at the door, the Centre’s move could provide a good poll plank to the Opposition. In April 2013, the Cabinet Committee on Economic Affairs (CCEA) had decided to decontrol the Sugar sector by giving freedom to mills to sell sugar in the open market and removing their obligation to supply the sweetener at subsidied rates for ration shops. As per the CCEA decision, regulated release mechanism, under which sugar quantity for open market sale is fixed by the government, stands abolished. ‘Besides, if mills are freed from mandatory supply of 10 per cent of their productions to the government at cheaper rate to meet ration shop demand the crisis would snow-ball,’ said the source. At the time of announcing the de-control, the Centre had said that sugar to be supplied through ration shops should be purchased by the state governments and the Centre will bear the entire subsidy cost at the rate of Rs 18.50 per kg. However, Delhi government has pointed out that despite the subsidy, it would have to bear a burden of Rs 3 per kg putting an additional annual financial burden of Rs 110 crores, and ‘this burden would increase at a fast pace.’

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