How the government function is interesting to know especially in mattes of levy sugar. Sugar mill has to give 10 percentsugar to govt as levy quota at a rate of Rs 19-20, though the market rate is Rs30-32.
Interestingly, government is neither lifting this sugar from the mills nor allowing sugar mills to reduce the quota resulting into stockpiling of huge sugar at the mills. Sugar cooperatives are major sources of sugar in the country.
However, on Friday a top Ministry official of the rank of food secretary hinted at reducing the quantity of sugar that mills need to contribute for supply through ration shops in 2012-13 after assessing the production situation.
In a representation made to the Food Ministry recently, the sugar industry contended that there is a case for a cut in levy sugar quota as the government has not been able to lift the entire quota in the last few years and consequently the carry forward stock has increased to 21 lakh tonnes for the 2011-12 marketing year.
Though the annual PDS demand for sugar is around 26 lakh tonnes, the average lifting by the state governments has been only 16 lakh tonnes in the last six years, they said.
The sugar industry has been demanding levy sugar quota to be reduced to 5 per cent in 2011-12 marketing year to save their inventory costs.