Govt notifies partial sugar decontrol

The government has notified the Cabinet Committee on Economic Affairs (CCEA) decision to remove two key controls on sugar sector.A On April 4, the CCEA had decided to decontrol the sugar sector by giving freedom to mills to sell sugar in the open market and removing their obligation to supply the sweetener at subsidised rates for ration shops. According to the gazette notification dated May 2, the Food Ministry has rescinded the control over sugar industry, especially on sugar sale in the open market and PDS, through Essential Commodities Act and Sugar Control Order.

As a result, the regulated release mechanism -- under which sugar quantity for open market sale is fixed by the government -- has been abolished with immediate effect. Besides, mills are freed from mandatory supply of 10 per cent of their production to the government at cheaper rate to meet ration shop demand. The sugar to be supplied through ration shops will be purchased by the state governments and the Centre will bear the entire subsidy cost, which is estimated to double to `5,300 crore after the decontrol.