November 22, 2001

'39'

        The Government has brought major changes in the sugar policy. The major decision taken by the Government is to completely decontrol the sugar industry in a phased manner. The levy obligation, which was reduced from 40% to 30% w.e.f. January 1, 2000, has been further reduced to 15% w.e.f. February 1, 2001. On November 13, 2001, Government has decided to make freesale releases of sugar for each factory on quarterly basis instead of monthly basis i.e. each sugar factory would be given releases for three months at a time in advance. Government has also decided to allow sugar factories to sell additional freesale quota up to 10% of the quarterly quota, provided the proceeds from the sale of the additional quota are exclusively spent for payment of cane price dues.

        In order to improve the viability of sugar industry, the Government has taken the following major steps: the levy obligation has been reduced to 15% w.e.f. February 1, 2001, the import duty on imported sugar has been raised to 60% w.e.f February 9, 2000 alongwith the continuation of countervailing duty of Rs. 850 per MT to restrict the flow of imported sugar. In order to promote export of sugar and to liquidate surplus stocks of sugar, the Government has taken the following measures. The quantitative restrictions on export of sugar has been lifted; and the requirement of registration of the quantity to be exported with the Agricultural Processed Food Export Development Agency (APEDA) has been dispensed with.

        Sugar factories exporting sugar have been allowed exemption from levy on the quantity of sugar exported.

        The adjustment in freesale stocks of sugar factories exporting sugar, which was being made at the end of 12 months from the date of export, has been increased to 18 months.

        Duty Entitlement Pass Book (DEPB) benefit @ 5% on the f.o.b. value of export has been allowed on export of sugar.

        There is no proposal under the consideration of the Government to exempt sugar from the purview of the Essential Commodities Act, 1955 or exempt the smaller units from the release mechanism.

        This information was given in Rajya Sabha today by the Minister of State for Consumer Affairs, Food and Public Distribution, Shri V. Sreenivasa Prasad.