After almost 1 year Since July 2010, yesterday, Agriculture Minister Sharad Pawar Said that the Central Governmet is expected to hold a meeting in next 10 days to discuss a meeting regarding decontrolling Sugar Sector from the country.
If partial or full decontrol happens it will be interesting to see what impact it could make on the efficiency and profitability of the Sugar mills, as the govt has criticized that some mill owners has so long tried to keep the prices ‘controlled’ by the govt, while most big industrial in this houses have had expressed that govt is doing ill to sector by not decontrolling the sector.
It is notable that as Sugar is one of the basic and most essential commodities so far that the central govt has to keep the prices administered rather that determined by market forces. However the 2nd phase of liberalization as we like to call it, started with getting rid of ‘administered’ prices in
fuel and so on; the govt is a lot more in promising action. The sugar de-control campaign mainly led by NCP politician Sharad Pawar also involves political formulas for Congress ruled Central Govt.to kick start in Maharashtra where political parties like MNS, Shivsena, BJP and NCP itself mainly holds the grounds.
fuel and so on; the govt is a lot more in promising action. The sugar de-control campaign mainly led by NCP politician Sharad Pawar also involves political formulas for Congress ruled Central Govt.to kick start in Maharashtra where political parties like MNS, Shivsena, BJP and NCP itself mainly holds the grounds.
The simple correlation and generalization that de-control will boost efficiency and profitability of Sugar Companies is over-estimation and wishful thinking, in our views. Having said that, it is a expected that the govt.will kick start the decontrol by removing levy quota and regulated release mechanism. However in our view, a complete liberalization in exports will do the best to revive this sector than anything else.
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