Sugar industry to gain Rs.3,000 crore on decontrol

New Delhi  : Leading sugar industry lobbies Thursday called for immediate decontrol of the sector, saying it would result in a gain of over Rs.3,000 crore and benefit mills and cane growers as well as consumers.

In a joint press conference, the Indian Sugar Mills Association (ISMA) and National Federation of Cooperative Sugar Factories (NFCSF) urged the government to immediately implement the Rangarajan panel recommendation that calls for lifting all controls on the sugar industry.

ISMA Director General Abinash Verma said the decontrol would boost sugar industry’s growth and benefit consumers as well as farmers.

He said the direct financial implication of the decontrol would be around Rs.3,000 crore. “Apart from this there will be savings on processing and inventory costs etc,” Verma said.

A committee, headed by C. Rangarajan, chairman of Prime Minister’s Economic Advisory Council, in a report last month had recommended lifting of all controls on the industry.

Among other steps, the panel suggested 70:30 revenue sharing of sugar sale between farmers and millers and scrapping the present levy system that requires mills to sell 10 percent of the output to the government at cheap rates for supplies through state-run fair price shops.

The committee also called for scrapping of the mandatory rule that requires sugar to be packaged in jute bags.

Jayantilal B. Patel, president of NFCSF, said unnecessary controls and regulations were negatively impacting sugar industry and farmers.

Patel urged the government to immediately implement the panel recommendations. “This is the fourth expert committee report in the last 31 years. We are urging the government for its immediate implementation,” Patel said.

Gautam Goel, president, ISMA, said the decontrol would pave the way for huge investments in sugar industry. “This industry has been stagnating in the last five-six years. There is hardly any new investment. People are sceptical because of uncertainties,” Goel said.

India is the second largest producer of sugar at nearly 340 million tonnes and the annual output is worth around Rs.80,000 crore (around $15.5 billion). The industry impacts the livelihood of 50 million farmers and employs 500,000 people directly at the mills.

Goel said sugar industry would grow at an average annual rate of 15-20 percent for the next five years if Rangarajan committee recommendations were implemented.

As per the panel assessment, the size of Indian sugar industry would double to Rs.1,60,000 crore in the next five years if it was freed from the government controls.