The Cabinet Committee on Economic Affairs (CCEA), for the third time in row has yet again deferred a decision on subsidy for export of raw sugar on account of unresolved difference between the Agriculture and Food Ministry on quantum of subsidy. While food Ministry had originally proposed a subsidy of Rs 2,000 per tonne on export of four million tones (mt) of raw sugar for two years, the Agriculture Ministry has proposed higher subsidy of Rs 3,500 per tone.
No unanimity on quantum of subsidy made CCEA defer its decision on the matter twice the last week. It then requested the concerned ministries to rework the subsidy. Accordingly, an informal group of ministries (IGoM), which met last week agreed on giving a subsidy of Rs 3,500 per tonne on export of 4 million tonnes of raw sugar, costing the exchequer Rs 1,400 crore. Contrary to the IGoM's decision, the Food Ministry moved a proposal suggesting Rs 2,800 per tonne as subsidy.
Back in December 2013, the government had approved Rs. 6,600 crore interest-free loan to the sugar industry for making payment to sugarcane farmers.