Import duty on sugar, edible oil increased

NEW DELHI, DECEMBER 30: The government has increased the import duty on sugar to 40 per cent and that on refined edible oil to 27.5 per ce...

NEW DELHI, DECEMBER 30: The government has increased the import duty on sugar to 40 per cent and that on refined edible oil to 27.5 per cent.

The levy obligation by the industry has been reduced by 10 per cent to 30 per cent. This is a step towards gradual phasing out of levy obligations as recommended by the high powered Mahajan Committee. But sugar will continue to be distributed through PDS for both categories of cardholders.

The ratio of levy sugar and free sale sugar has been modified to 30:70. The system of pro rata quota for every sugar units for releasing sugar into open market on periodic basis has been brought back. All the ad hoc and discretionary quota for sugar release has been abolished. This would remove the existing anomalies in the periodic release mechanism.

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The imported sugar will effectively come under the mechanism of levy obligation so that it would give a level playing field to the domestic industry.

Minister for Consumer Affairs and Public Distribution, Shanta Kumar told newsmen after the Cabinet meeting that the government will make all out effort to give a level playing field to the domestic sugar and edible oil industry. He is confident that with the increase in basic import duty on sugar to 40 per cent from the existing 27.5 per cent and the prevalence of a countervailing duty of Rs 850 per tonne, the imports will be discouraged. At the same time this would not adversely affect the consumers as much upward trend in domestic prices is not possible due to adequate stocks in the country.

The minister stated that he would soon come out with a long-term sugar policy based on the recommendations of the Mahajan Committee. He assured that all steps are being taken to not only protect the domestic industry, but also the farmer and consumers. He hoped that the sugar industry will now be in a position to pay off the arrears to cane growers which has accumulated to Rs 510.60 crore. He said that keeping the interests of all these classes, the government preferred to increased only the import duty on refined edible oil. The import duty on crude edible oil and oilseed will remain unchanged.

Shanta Kumar assured that while effecting a reduction in levy obligation by 10 per cent there will be no shortage of levy sugar. The government already has a carryover stock of levy sugar from sugar year 1998-99 (Oct-Sept) amounting to 7.27 lakh tonne. The likely levy procurement in sugar year 1999-2000 is likely to be 51.20 lakh tonne, thus raising levy sugar stock to 58.47 lakh tonne. Against this only 46 lakh tonne of levy sugar will be required for distribution and 0.40 lakh tonne will be required to meet the export quota by the government agencies. The minister is hopeful that by the end of the sugar year 1999-2000 sugar year there will be a carryover stock of 12.07 lakh tonne of levy sugar.