Millennium Post

Rangarajan Committee advises deregulation of sugar sector

The Rangarajan Committee on Friday recommended deregulation of the sugar sector, the only remaining industry that continues to be controlled by the government, by giving freedom to mills to sell sugar in the open market. It has also suggested doing away with the system of levy sugar, under which the mills are required to sell 10 per cent of their production to the government at below market price for running ration shops.

While other sectors of the economy has been freed, the sugar industry continues to remain under the government control, right from the level of production to distribution. The Centre fixes the quantity of sugar that mills can sell in the open market and ration shops. ‘Rationalisation of sugarcane pricing and liberalisation of sugar trade need to be introduced over a two to three year period, in a calibrated and phased manner,’ the committee, headed by C Rangarajan said in a report.

Food minister K V Thomas on Friday said that his ministry will take a time-bound decision on the Rangarajan panel's recommendations for sugar sector decontrol. An eight-member expert panel, headed by Prime Minister's Economic Advisory Council [PMEAC] chairman, C Rangarajan, released a report recommending scrapping of major government controls on the sugar sector to move towards the reform process.     

'The report has been submitted to the prime minister. We will take a time-bound decision once it is examined by the PMO and comes to us,' Thomas said.

The government's aim is to protect the interest of farmers, consumers and the mills. 'The final call on the recommendations would be taken keeping this principle in mind,' he said. Sugar is a regulated sector in the country.

Way back in 1971-72 and 1978-79, the government had made attempts to decontrol the sector but had to roll back. In mid-2010, efforts were also initiated by former food minister Sharad Pawar in this regard.
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