Home » Business » Cabinet approves partial decontrol of sugar sector
In a meeting that went on for more than an hour, CCEA, chaired by Prime Minister Manmohan Singh, also dismantled the regulated release mechanism, which allows mills to sell only a specified quantity within a fixed timeframe.
According to a mechanism approved by CCEA, states will now purchase sugar from open market through a transparent bidding process and sell it cheap through ration shops.
The difference between the two prices will be borne by the Centre, but with a cap of two years.
“According to our estimate, the current market price of sugar is Rs 32 per kg, while the price under the public distribution system is Rs 13.50 per kg.
"This difference between these two prices will be paid to states. For this, the Centre will bear an additional subsidy burden of around Rs 2,700 crore (Rs 27 billion),”
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