The government is not averse to decontrolling the sugar sector provided the move does not affect the interest of farmers and consumers, Food Secretary B C Gupta said on Tuesday.
At present, the sugar sector is under the government control, from production to distribution. The Food Ministry fixes the monthly quota that sugar mills can sell in the open market and ration shops.
“It is true there are controls. But the government is not averse to decontrol the sector, provided the interest of all stakeholders are protected,” Gupta said at the third Kingsman Indian Sugar Summit nin N Delhi.
He further added that there are differences of opinion between the cooperatives and the private mills about some areas. “I request them to deliberate and reach a consensus.
Then, we can proceed,” he said.
The official said that the consultation process on the decontrol issue has already begun.
Industry body Indian Sugar Mills Association (ISMA) has been demanding that the government give a free hand to sell sugar in the open market and remove the levy sugar system.
Under levy sugar system, mills are required to sell 10 per cent of their production to the government at a subsidized rate for distribution through ration shops.
Gupta further said that the government has reduced the levy sugar burden on millers from 65 per cent to 10 per cent in the last few years and will further bring it down if necessary.
The industry supplies levy sugar at 60 per cent of the cost of production, resulting in a loss of about Rs 2,500- 3,000 crore every year, according to industry body CII, which recently threw its weight behind the demand for decontrol of the sugar sector.