NEW DELHI: States may soon have to bear major share of the sugar subsidy if they want to continue selling the sweetner under public distribution system at cheaper rates. The Centre is likely to cut its contribution substantially

At present, the Centre pays a subsidy of Rs 18.5/kg for people to get sugar at Rs 13.5/kg at ration shops. Sources said the Union food ministry has written to Union finance ministry to do away with Centre shelling out nearly Rs 4,500 crore annually as sugar subsidy to 30 states. There are indications of the budget announcing major reduction in this subsidy, which is borne by the Centre. Other ministries have also drawn up long wish lists for the budget. '