Lakshman told The Financial Express that the sugar industry had been neglected by the Union government despite the industry and trade made a series of representations to air their problems. Undue importance was given to temporary phenomena like information technology, he added.

He said the government should not continue importing sugar at the cost of domestic industry.``We are only looking at survival not at profitability.''In April '98, the government increased the import duty of the commodity from 5 per cent to 20 and later in January '99, it was further upped by 7.5 per cent. Still, India has the lowest import duty when compared to 60 per cent in Pakistan and Sri Lanka, 200 per cent in Bangladesh and 300 per cent in the European Union, hesaid.

He said thanks to WTO and OGL, sugar was currently a glut commodity. The dumping of sugar into the country would choke the industry as the country's consumption was almost equivalent to its production.

The expected figures during 1998-'99 (sugar year October to September), would be: opening stock 54 lakh tonnes, imports 18 lakh tonnes, consumption 150 lakh tonnes, estimated production 155 lakh tonnes, closing stock 23 lakh tonnes.

The inventory levels have been progressively coming down over the past few years as is obvious from the closing stock of 1997-'98 at 54 lakh tonnes whereas in 1996-'97 it was 63 lakh tonnes.

According to Lakshman, the sugar industry faced problems like excessive production and huge imports caused the factories to close down without any net realisation.

He said the dual pricing system (free-sale and levy system) was also not conducive to the health of the industry. The government buys the levy sugar at Rs 7.50 to Rs 8.50 a kilo from the factories as against thewholesale price of Rs 14. A factory is required to deliver 40 per cent of its produce to the government towards levy with the rest sold through free-sale in the open market.

The two year-old Mahajan Committee report on the decentralisation of sugar was yet to be enacted. The report has recommended reducing the levy to 20 per cent.