The Food Ministry has decided to put on hold its proposal to hike retail price of sugar sold through the ration shops as the government is considering the Rangarajan report on sugar decontrol.
Since 2002, sugar is being sold at Rs 13.50 per kg in ration shops, while the government buys it from mills at about Rs 22-23 per kg.
According to a senior government official, “The Food Ministry has started examining the recommendations of the Rangarajan report on sugar decontrol. The issue of raising the central issue price (retail price) of sugar would be discussed along with the report’s suggestion on removal of levy sugar mechanism“.
Among various recommendations, the Rangarajan report has suggested removal of levy sugar mechanism under which mills are required to sell 10 per cent of their production to the government at cheaper rate for supply through ration shops.
The report suggested the government to buy sugar meant for ration shops distribution at ex-mill price from the open market and allow states to fix the retail price.
Presently, the Ministry has sought views of the state governments on recommendations of the Rangarajan report.
Sugar production in the country is estimated to be 23 million tonnes this year just sufficient to meet the demand.
Last year, production had stood at 26 million tonnes.