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Free sale sugar quota enhanced to 90%

The eagerly awaited sugar levy decontrol has taken a step further with mills being allowed to sell 90 per cent of their produce in the open market, up from 85 per cent.

Presenting the Union Budget in Parliament on Thursday, Finance Minister Yashwant Sinha announced that the price of sugar sold under the public distribution system has been increased to Rs 13.50 per kg from Rs 13.25 per kg.

As part of the government's plan to fully decontrol the sugar industry, the minister said that the levy quota has been reduced to 10 per cent.

This, however, would not have any impact on the supply of sugar for the PDS, which would continue at the same rate of 2,16,000 tonnes per month, given the excess stocks with the government, official sources said.

While the free sale quota has been increased from 85 per cent to 90 per cent from the next quarter, total levy decontrol is likely to be implemented from October, provided futures trading in the commodity is in place by then.

Depending on the beginning of futures trading, final decontrol can even be pushed into 2003, though still within the next fiscal, they said. The October-November period is the best time for decontrol, as the stocks at the beginning of the crop season are at their lowest, reducing the chances of an adverse impact on the prices, they said.

In a departure from the earlier proposal to retain the sugar release mechanism, the government has also committed itself to doing away with the release quota for individual mills, they said.

PTI

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