npavan78
08-08-2008, 09:13 AM
The Union Cabinet is likely to consider on Friday a proposal mooted by the food ministry for de-controlling the sugar sector. The ministry has prepared a note for abolishing the existing release order mechanism as well as the levy system, sources said.
However, it has not touched the controversial area limit for setting up sugar factories, they added. At present, the government issues order every month as to how much quantity of sugar a mill can sell in the open market and how much it should supply to government. Under the levy system, mills are required to sell to the Centre certain quantity of sugar on a fixed price.
If the Cabinet decides to accept the proposal, the government will have to buy sugar from open market for the requirement under the public distribution system (PDS). The government has already abolished the release order mechanism for exports as the country had a huge surplus of stocks due to large scale production. —PTI/New Delhi
Sources said the food ministry proposal has not included the issue of area limit as government protects companies by stipulating that no mill can be set up within a radius of 15 km of an existing mill.
However, mills will be allowed to purchase sugarcane outside their demarcated areas if the policy is approved, sources added.
Meanwhile, the sugar industry is expecting production to be around 20 million tonne in 2008-09 season starting from October. Indian Sugar Mills Association director general SL Jain in the past week had said that in 2007-08 season, the sugar output is likely to be close to 26.5 million tonne.
However, it has not touched the controversial area limit for setting up sugar factories, they added. At present, the government issues order every month as to how much quantity of sugar a mill can sell in the open market and how much it should supply to government. Under the levy system, mills are required to sell to the Centre certain quantity of sugar on a fixed price.
If the Cabinet decides to accept the proposal, the government will have to buy sugar from open market for the requirement under the public distribution system (PDS). The government has already abolished the release order mechanism for exports as the country had a huge surplus of stocks due to large scale production. —PTI/New Delhi
Sources said the food ministry proposal has not included the issue of area limit as government protects companies by stipulating that no mill can be set up within a radius of 15 km of an existing mill.
However, mills will be allowed to purchase sugarcane outside their demarcated areas if the policy is approved, sources added.
Meanwhile, the sugar industry is expecting production to be around 20 million tonne in 2008-09 season starting from October. Indian Sugar Mills Association director general SL Jain in the past week had said that in 2007-08 season, the sugar output is likely to be close to 26.5 million tonne.