'Panel recommendations will bring about stability in sugar sector': Rangarajan

Last Updated: Fri, Oct 12, 2012 11:40 hrs

Chairman of Prime Minister's Economic Advisory Council, Dr. C. Rangarajan, on Friday said on Friday that the recommendations of the panel will bring about stability in the sugar sector.

The Rangarajan Committee on deregulation of sugar sector in India has recommended dismantling of the levy obligation for sourcing PDS sugar at a price below the market price

Commenting on this move, Rangarajan said that the recommendations would help in increasing the reach of the Public Distribution System.

"All that we have said is that we should dispense with the levy of sugar. And the Public Distribution System (PDS) caters to a very miniscule portion of the total system. We believe that the whole set of recommendations that we have introduced will introduce an element of stability in the sugar sector," said Rangarajan.

"And, probably this recommendations will also lead to an improved production of sugarcane and sugar. That is where the real answer lies," he added.

Rangarajan pointed out that even now the imported sugar is allowed sometimes at a very low import duty.

"Therefore, if the prices of sugar in the domestic market rises beyond a particular level, then there is a possibility of the imported sugar even now. Therefore we should allow the domestic market to be integrated with the international market. But at the same time we are saying that a modest level of import tariff and an export tariff is decidable," he said.

The committee has also recommended dismantling of the levy obligation for sourcing PDS sugar at a price below the market price.

"There is now, even today, a market price for sugar, as well as a PDS issue price for sugar. There are two prices. Now it is open to the state government to procure it for the open market and sell it at whatever level it feels comfortable. Therefore there would still be an issue price for under the PDS system," said Rangarajan.

"The state governments have the wherewithal to price the sugar below the price at which they may be procuring because each state government will get a share of the 30 billions," he added.

Rangarajan further said that there was need to ensure that here is equalisation of prices in different regions of the country.

"I think it is a competition within the sugar industry and there are several states which are producing sugar. Therefore it is this that will really result in the equalisation of the sugar prices across regions and so on," he said.

The Prime Minister, Dr. Manmohan Singh, had set up a committee under the chairmanship of Dr. Rangarajan to look into all the issues relating to the deregulation of the sugar sector.

The committee has completed its task, after several rounds of deliberations, consultations with stakeholders, and discussion with chief ministers of major sugar-producing states. The report was submitted to the Prime Minster on October 10.

Members on the committee were T. Nandakumar, Member, NDMA, Dr. Ashok Gulati, Chairman, Commission on Agricultural Costs and Prices, Dr. Raghuram Rajan, Chief Economic Advisor, Sudhir Kumar, Secretary, Food and Public Distribution, Ashish Bahuguna, Secretary, Department of Agriculture and Cooperation, and Dr. K. P. Krishnan, Convener, as the then Secretary, Economic Advisory Council. (ANI)

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