The Hindu : Sugar may be out of PDS

Online edition of India's National Newspaper
Sunday, May 05, 2002

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National

Sugar may be out of PDS

By Gargi Parsai

New Delhi May 4 . With the Government's move to decontrol the sugar industry by the end of this year, it is likely that the rationed sugar for the below the poverty line population (BPL) may be discontinued. After decontrol, the Government will have to purchase the PDS requirement from the open market and subsidise it. The subsidy is likely to run into Rs. 400 crores for which no firm decision has been taken so far.

Another significant move is to seek a consensus among the sugarcane-growing States for a uniform formula for fixing the statutory minimum price (SMP).

The Mahajan Committee on Sugar Industry had recommended the setting up of a separate Board for this, but the Government has not accepted the suggestion as it feels that the work can be done by the Commission for Agricultural Costs and Prices.

At the moment, there is a wide difference between the SMP announced by the Centre and provided by the States which is much higher.

Having accepted the recommendation of the Mahajan Committee report, the Government is committed to freeing the sugar industry from the levy control, the quarterly freesale quota requirement and set up futures trading markets for trading in sugar.

At present, there is a 10 per cent levy requirement to be met by the industry.

According to the Minister for Food and Consumer Affairs, Shanta Kumar, the Government will then purchase from the free market its requirement for the PDS.

The above poverty line population has already been weaned out of the system.

The Food Ministry has recommended that the rationed sugar be continued for the BPL population. But the Finance Ministry is yet to take a view on the subsidy involved.

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