It is almost a certainty that the Central Government will decontrol the prices of sugar and the mills will be free to sale it in open market on demand and supply basis and calculate it on cost of production and margin of profit.
The Government has already adopted this policy is decontrolling the prices of petrol and diesel to be decided by the open market system. Presently the Government is managing and controlling the sugar prices by (1) Regulated Release system by a fixing the quantities of sugar that mills can sale in open markets and another (2) Levy Sugar liability by procuring 10 per cent of the mill production at the rate of Rs.20 per kilogramme for Public Distribution System and selling to the ration card holders at the rate of Rs.13.50 per kilo. This system is costing about Rs.3000 crores.
The Union Food Minister Mr.KV Thomas has said that by the end of February the Government will take the decision to decontrol Rs.80,000 crore sugar industry. The Rangarajan Committee of experts has recommended that both the system of Government control on sugar industry should be withdrawn and the mills be allowed to sell in open market. The Committee also recommended that import and export policy of the Government should be permanent and not periodic.
The mills should share its 70 per cent income with the sugarcane growers. The Government is on one hand telling about its intentions to reduce inflation and price rise and bring forward food security bill and on the other hand it is decontrolling the petrol, diesel, sugar and enhancing support prices on foodgrains and negating it with much more increase in the prices of fertilizers. With the free open market sale the motive of the mills to sale it markets offering high prices. It will lead to more export of sugar and shortage of it in the home markets with escalation of prices.
The prices of petrol and diesel and sugar with constant increase may soon go upto Rs.100 per litre and per kilo. In the decade of 1970 after the fall of Morarji Desai Government the succeeding Prime Minister Mr.Charan Singh to generate election funds from large number of sugar mills in his home state of Uttar Pradesh abolished the duel price system on the sugar.
It resulted in sudden spurt in sugar price from Rs.3-4 per kilo to Rs.13-14 per kilo. At present sugar selling price is around Rs.40 per kilo with decontrol it is bound to hit Rs.100 per kilo. There are sugar mills is many states including Madhya Pradesh. But Maharashtra and Uttar Pradesh are leading states. It is on the biggest of source of election funds. The present policy of decontrolling of sugar may be viewed with the coming general elections to the Lok Sabha and State Assemblies in 10 states.
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