The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a proposal to allow states to fix the retail price of sugar sold through the Public Distribution System (PDS). As of now, the price is Rs 13.5 a kg, unchanged since 2002. “The CCEA has approved the proposal on PDS sugar price,” the Press Trust of India reported, quoting a source. Sources said the Centre would continue to give subsidy for state purchases at Rs 18.5 a kg (the difference between the retail issue price and the ex-mill price of Rs 32 a kg). After the decontrol of the sugar sector in April 2013, state governments were asked to buy sugar from the open market to meet PDS demand. States such as Gujarat and Kerala have been demanding the Centre either increase the subsidy for this year and share the transport cost or give states the freedom to increase retail PDS sugar prices. Before the sector was decontrolled, it was mandatory for millers to supply 10 per cent of their overall production to the government at a rate lower than that prevailing in the retail markets, for it to be sold at ration shops. About 2.8 million tonnes of sugar a year is required for PDS.