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GoM approves incentives for raw sugar export

17 Jan 2014 Evaluate

In a move aimed at reducing white sugar production in the country, an informal group of ministers (GoM), headed by agriculture minister Sharad Pawar, approved incentives to beleaguered sugar industry for exports of raw sugar upto four million tonne over the next sugar season.

Besides, the PM-constituted panel has asked the food ministry to rework its proposal on the quantum to be distributed. However, the food ministry would have to raise its subsidy offer by at least 46% to Rs 3,500 per tonne to make exports viable in a global market, which are already drenched with supplies. According to reports, the Food Ministry has proposed an incentive of Rs 2,390 per tonne on raw sugar, with the burden to be shared by both the Centre and state governments. While, incentive of Rs 2,390 per tonne as suggested by the Food Ministry would cost the government around Rs 1,000 crore for two years, incentive of Rs 3,500 per tonne, would cost the exhequer Rs 1,400 crore.

However, this quantum would be given per tonne raw sugar basis from the Sugar Development Fund of the Food Ministry. Further, the policy of incentives, which would be reviewed constantly, is compatible with WTO norms.

After deciding upon the quantum of subsidy in consultations with the finance ministry, the food ministry is expected to place the proposal before the Cabinet Committee on Economic Affairs (CCEA) in its next meeting for approval.

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