Sugar industry has never found a favourable space in Budgets

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Rajshree Pathy: Mar 01 2011, 01:14 IST

It was evident that the most threatening issue for the government is food inflation and the FM’s Budget presentation made a determined effort at bringing in a new dynamism in the rural economy. The inclusion of warehouses and cold storage chains as part of the infrastructure sector is most welcome, as this will make it eligible for inclusion in the viability gap funding scheme and facilitate soft credit terms from banks. Excise duty on air-conditioning for cold storage is completely exempted; however, the major issue faced by promoters of these chains is the non-availability of quality power and the high costs of captive power generation. Some support for this would have boosted public-private partnerships in this sector.

The sugar industry has never found a favourable space in any FM’s Budget, even though it is the only industry that supports the farmer in the most organised manner, supplying seeds, lending for irrigation, arranging for harvest and transport of sugarcane, and storage of processed sugar throughout the year. The industry has been bearing the 10% subsidy of sugar procured by the government for PDS and yet no mention of it in the Budget! The pre-Budget memorandum submitted to the FM from the sugar industry asks for inclusion of sugar warehousing under Section 35 AD of the IT Act introduced in the previous Budget. This has been ignored. Despite many demands for support for farm mechanisation, no real measures have been announced, except for import duty reduction from 5% to 2.5% for agricultural machinery

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