Recommendations of Rangarajan Committee

The Rangarajan committee on 12th october presented a road map for phased decontrol of the highly regulated Rs 80,000-crore sugar industry by suggesting removal of the levy obligation, release mechanism and having a uniform, revenue-linked sugarcane price. The committee was headed by Chairman of the Prime Minister’s Economic Advisory Council.

Important Recomendations are:

  • State governments should buy sugar from the open market to supply to ration shops instead of asking mills to sell 10% of their production at a loss to the government.
  • The committee has recommended a two-step arrangement for payment to farmers. It said that the Fair and Remunerative Price (FRP) as determined by the Central Government should be paid upfront to sugarcane farmers every year. Following that after every six months sugar mills should share the revenue earned from selling sugar and also its byproducts like bagasse and mollasses in a proportion of 75:25 in favour of the growers. The price of sugar (ex-mill) and its byproducts for calculating this ration should be published by the state governments on a half yearly basis.
  • The central government will continue to distribute the around Rs 3,000-crore annual subsidy incurred in selling sugar through ration shops but it will go to the states, which will also enable them to bring down the procurement cost

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