NEW DELHI, June 25: The Union Cabinet decided to purchase 12 lakh tonne of freesale sugar from the industry to meet the current shortfall in levy requirement for the public distribution system (PDS) in the country. The levy sugar price for 1997-98 has been fixed at Rs 1,022 per quintal to provide a fair price to the sugar mills for the statutory levy sugar taken from them.The Cabinet Committee on Economic Affairs approved the pricing formula for the purchase of sugar will be based either on bank evaluation of sugar stock maintained by the industry for extending credit. As per the formula, the lower value of the average preceeding three months open market prices or the current open market prices or the landed cost of import sugar will be considered.
The sugar quantity to be purchased from the industry would, however, depend upon the requirement to make good the likely deficit on the levy side for operation of PDS.
Earlier during the regime of the UF government, the Centre took a loan of 5 lakh tonne offree sale sugar from the industry to meet the levy shortfall. This amount is yet to be returned to the industry. However, there was no proposal to increase retails price of sugar under PDS.
The Cabinet also decided to set up Eleventh Finance Commission for distribution of proceeds of taxes between the Centre and the states from year 2000-01.
The commission would submit its report next year and would be reflected in the Budget for the year 2000-01.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
