PM forms expert committee on sugar decontrol

New Delhi: Prime Minister Manmohan Singh today constituted an expert committee, headed by his Economic Advisory Council Chairman C Rangarajan, to examine issues related to decontrol of the sugar sector.

Earlier this month, the representatives of the apex sugar industry bodies ISMA and NFCSF had met Finance Minister Pranab Mukherjee, seeking partial decontrol of the sector, including freedom to sell sugar in the open market and doing away with the levy obligation for Public Distribution System.

"The committee would look into all the issues relating to de-regulation of the sugar sector and it has been requested to complete its task as early as possible and give its recommendations to the Prime Minister," a statement issued by PMO said.

The other members of the committee include Kaushik Basu, Chief Economic Adviser, Ministry of Finance, and secretaries to the Department of Food and Agriculture.

Other members of the panel are: Commission for Agricultural Costs and Prices (CACP) Chairman Ashok Gulati, former Agriculture Secretary Nand Kumar and K P Krishnan, Secretary EAC Convener.

"The Committee has been empowered to involve such experts, academics as required as special invitees," the statement said, adding that the Food Ministry would provide the necessary support to the committee in discharging its functions.

The statement did not state any deadline for the committee to submit the report. The sugar industry is under government control, right from the level of production to distribution.

Under the levy obligation, sugar mills are required to sell 10 per cent of their output to the government at below-cost rates for supply to ration shops. Mills supply levy sugar at 60 per cent of the cost of production, resulting in an annual industry loss of about Rs 2,500-3,000 crore.

Industry has also been demanding removal of the monthly release system under which food ministry allocates quantity of sugar to be sold in the open market every month.