Comments
The Budget 2013-14 may bring in good news for the highly regulated sugar sector. The Union Government is likely to decide on implementing the Rangarajan Committee recommendations on decontrolling the sector in the next 15 days, Food Minister K.V. Thomas said on Friday. The Government’s decision “can be part of the Budget announcement,” Thomas told reporters on the sidelines of an Assocham event on commodity futures.
Two major controls
The expert panel, headed by Prime Minister’s Economic Advisor Council Chairman C. Rangarajan, had suggested doing away with the regulated release mechanism and levy obligation in the sugar sector, the two major controls, immediately. Under the release mechanism, the Government fixes the quota for millers to sell sugar in the open market, while under levy, mills are obligated to sell a tenth of their output at a lower price to the Government for the public distribution system.
The panel had also recommended easing the other restrictions gradually, such as the rationalisation of sugarcane pricing, abolition of cane area regulation and bonding, and doing away with the minimum distance criteria for setting up mills as States dispense with cane area reservation.
Thomas said he had discussed the Rangarajan panel report with the Agriculture Minister Sharad Pawar and an internal note on levy and release mechanism was circulated on Thursday. Removal of the release mechanism will help millers manage inventories and ensure better cash flows. Further, removal of the levy system could help the industry save about Rs 3,000 crore annually. Addressing the event, Thomas said the Rangarajan panel recommendations would be implemented by the Government, unlike the plight that other other committee reports have met. He further said that the country had been able to break the five-year sugar cycle and supplies were comfortable for the fourth consecutive year.
Thomas said the amendment Bill to the Forwards Contract Regulation Act (FCRA) would be passed in the coming session of Parliament. The FCRA Amendment Bill, 2010 seeks to provide more autonomy and power to the Forward Markets Commission to regulate the commodity markets effectively.
Responding to industry concerns on the proposed move to introduce Commodity Transaction Tax (CTT), Thomas said his Ministry had an independent view on the issue, which had been conveyed to the Finance Ministry. “This (commodity market) is a goose that lays the golden eggs. When the issue (CTT) comes, we should not take a partisan view,” he added.
> vishwanath.kulkarni@thehindu.co.in
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.