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Rangarajan panel favours sugar price decontrol, lifting curbs on sector

A panel, headed by the Prime Minister's Economic Advisory Council Chairman C. Rangarajan, has suggested withdrawal of curbs on sugar sector and also recommended scrapping of state-declared cane prices.

BT Online Bureau   New Delhi     Last Updated: October 12, 2012  | 17:35 IST

A panel, headed by the Prime Minister's Economic Advisory Council Chairman C. Rangarajan, has suggested withdrawal of curbs on sugar sector , allowing millers to sell the produce in the open market and sharing of revenue with cane growers.

The panel appointed by Prime Minister Manmohan Singh, called for scrapping of levy sugar system under which it is mandatory for the sugar mills to sell 10 per cent of their output to the government for supply to the poor at subsidised rates.

"The levy quota system is leading to unnecessary losses to the sugar mills. Our recommendation to the government is that sugar for the public distribution system (PDS) should be bought from the open market," Rangarajan said at a press conference after submitting the report to the prime minister in New Delhi.

He said the panel has recommended scrapping of state-declared cane prices and has recommended revenue sharing mechanism, under which 70 per cent of the proceeds should go to sugarcane farmers.

The latest move of withdrawing curbs from sugar sector follows a series of economic reform measures announced by the central government in the last few weeks.

Recently the government decided to allow foreign direct investment (FDI) in multi-brand retail and hiked diesel price, in a bid to cut budget deficit. The government has also proposed to hike FDI limit in insurance sector.

with inputs from IANS

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