PM-appointed panel favours lifting curbs on sugar sector

Last Updated: Fri, Oct 12, 2012 09:20 hrs

New Delhi, Oct 12 (IANS) An expert panel appointed by Prime Minister Manmohan Singh Friday 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 committee, headed by the Prime Minister's Economic Advisory Council chairman C. Rangarajan, called for scrapping of levy sugar system, under which it is mandatory for the sugar mills to sell 10 percent 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 should be bought from the open market," Rangarajan said at a press conference after submitting the report to the prime minister here.

Rangarajan said the panel has recommended scrapping of state-declared cane prices.

The panel has recommended revenue sharing mechanism, under which 70 percent 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 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.

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