Government decontrols sugar, hike in price likely

Mangaloretoday/CNN/IBN

New Delhi, April 4: In what could be seen as a significant concession to the powerful sugar lobby, the government on Thursday cleared the decontrol of the product.

The move will likely raise the sugar prices as decontrol means that the manufacturers of the product will now get to decide on the prices without government intervention.

The move will also mean increased expenditure for the government as it provides sugar to the poor at subsidised rates. Sugar manufacturers, however, argue that the decision will benefit the farmers as they will get better returns due to raised prices.

Food Minister KV Thomas, however, said that the "PDS (Public Distribution System) sugar will continue at the same rate, same quantity". "States are free to purchase sugar through transparent system. No decision has been taken on excise duty," he added.