Sugar decontrol may be effective from March: ISMA's Verma

There was a lot of noise about sugar decontrol being introduced very soon. In fact, the food minister at the Associated Chambers of Commerce and Industry of India (ASSOCHAM) event in mid-February raised expectations and said that they are likely to take a decision on partial sugar decontrol within 15 days. Abinash Verma, Director General of the Indian Sugar Mills Association (ISMA) told CNBC-TV18 that he expects partial sugar decontrol to be implemented in March.

He also feels the government may do away with sugar levy whereby sugar mills are obliged to supply sugar for public distribution at a discounted price. Another problem facing the sugar industry, the release mechanism that entitles producers to sell produce according to the limits set by the government may also be abolished, believes Verma. 

Here is the edited transcript of the interview on CNBC-TV18.

Q: What are your expectations with respect to sugar decontrol itself? Realistically, when do you think it may come through and what will be taken up because there were so many proposals made by the Rangarajan Committee with respect to introduction of new cane pricing formula, the levy quota removal etc, what is your expectation?

A: First of all, about the timeline, we will have to wait for the government to take a decision. But, we believe it should happen very soon in the month of March itself. Regarding the proposals that are being very actively considered by the government, we believe that the government would look at partial decontrol which would be on the sugar sale side.

Two very important controls which we believe are very archaic and have outlived their utility are abolition of the regulated released mechanism under which we are told every month or every quarter, how much of our sugar we can sell. Secondly, there is a burden on the industry to supply the levy sugar for the public distribution system at a discounted price. We believe that these two controls would be considered for removal very shortly and we think it should happen in the month of March.

Q: This is a government constrained for money. Do you think that at a time like this they will be willing to forego the reduced prices at which you guys supply to the public distribution system (PDS) or you have some assurances, some reason to believe that this step will also be contemplated as early as this month?

A: First of all, let us understand why should an industry be told to bear the levy burden of a social welfare programme of the government, no other industry is being told to do so.