Prime Minister had set up a committee under the chairmanship of Dr. C. Rangarajan, Chairman, Economic Advisory Council to the Prime Minister to look into all the issues relating to the deregulation of the sugar sector. The committee completed its task, after several rounds of deliberations, consultations with stakeholders, and discussion with Chief Ministers of major sugar-producing states. The report was submitted to the Prime Minster on 10-10-2012.
Establishing the basis for an efficient sugar industry would require a multi-pronged approach as suggested in the report. Rationalization of sugarcane pricing and liberalization of sugar trade need to be introduced over a two to three year period, in a calibrated and phased manner. However, levy sugar obligation and administrative control on non-levy sugar need to be dispensed with immediately. The regulations regarding cane area reservation and bonding may be dispensed with by states over the long run, and as states discontinue reservation area, the Centre should dispense with the minimum distance criterion. Implementation of the recommendations would enable India to continue to meet its domestic demand while also ensure growth of a competitive and efficient market.