The Indian government on Thursday lifted most controls from the Rs 80,000-crore sugar sector in a move expected to drive in investment but raise subsidy burden.
The government allowed millers to sell sugar in the open market and also removed their obligation to supply sugar at subsidised rates to ration shops.
The decision will lead to government´s annual sugar subsidy doubling to Rs 5,300 crore, while saving the industry about Rs 3,000 crore per year.
Food Minister K V Thomas maintained that the decision will not lead to any increase in retail prices and said the government will continue to sell subsidised sugar through ration shops.
Amongst the most tightly controlled agricultural commodities in India, the government had controls on nearly every aspect of the industry.
Limits on exports of sugar were also lifted as per last year´s recommendations of a government panel.