INDIA: Calls to drop sugar supports and help consumers
Published: 07/03/2009, 7:28:21 AM
Seeking to put a tab on the rising Government subsidy bill, the Economic Survey has called for total decontrol of sugar, pharmaceutical and fertilizer sectors. It recommended changing the subsidy policy by giving government assistance directly to consumers instead of producers, according to the Hindu newspaper.
At present, the sugar sector is totally controlled by the Centre, right from setting up a mill to selling the sweetener in the market. In the fertilizer sector, the government has fixed the maximum retail prices of all major nutrients to provide farmers these fertilizers at cheaper rates while subsidising manufacturers on the difference between cost of production and MRP.
In the 2007/08 budget, the government had mentioned about launching a pilot project on direct subsidy to farmers but the scheme remained on paper following stiff resistance from various quarters. The Economic Survey has recommended converting fertilizer subsidy from a part-producer subsidy to a wholly farmer-user nutrient-related subsidy, with freedom to producers to set prices of formulations with different mix of nutrients.