Speaking to The Financial Express, Indian Sugar Mills Association (ISMA) president SL Jain said the proposed hike of 60 paise per kilogram in levy prices has to be implemented as the government has already increased the sugar prices routed through the public distribution system (PDS) recently.

"We are positive, if the matter is taken to court, the verdict would be in our favour. However, going through court is time consuming and the purpose itself would be defeated," he said.

Jain said that twice before, in 1974-75 and 1979-80, the government had refused to increase levy prices even after increasing the price of sugar sold under PDS. Both the times themanufacturers had filed cases and won it. But the judgement took more than a decade to be delivered. "That is why we are waiting for the matter to be settled without going to court."

A final decision has been delayed on fixing levy prices because the finance ministry does not want to give manufacturers a 60-paise hike at one go, said Jain. "The finance ministry wants to give only 30 paise hike and this is not acceptable to us."

There is a disagreement between the food and the finance ministries on the modality of adjusting molasses prices and the share to be passed on to the producers. While the finance ministry wants that molasses prices should be adjusted on the basis of last year's average price, the food ministry feels millers should be paid as per the recommendations of the Bureau of Industrial Cost and Prices (BICP) which has suggested that molasses prices should be adjusted against the current prices.

"The government has no reason to flout the suggestion of BICP. It is only because of itslethargic approach, the matter has been delayed," said Jain. According to him, around 95 per cent of the levy sugar has already been drawn by the government. "I don't know how much longer can sugar manufacturers wait until their patience runs out."

Jain said that the government should not use the upcoming elections as an excuse for not taking the decision at the moment.

"The decision to increase levy prices will not have any connection with the elections as the more sensitive decision of increasing PDS price has already been taken".

Jain said that despite the fact that court settlement took a long time, sugar manufacturers would surely move court if the government kept dilly-dallying on the issue for a longer time.