The molasses allotment policy of the Tamil Nadu government for the stand-alone downstream alcohol industries lacks clarity. For quite some time, the Director of Sugar has not floated a tender for the allotment of molasses and as a result, the downstream alcohol and other industries have been forced to close operations. A few weeks back, the Tamil Nadu Cooperative Sugar Federation floated a tender for molasses at an upset price of Rs 4,500 a tonne and asked the molasses-based industries to bid for the tender. However, for some unknown reason, the tender was cancelled at the last moment.
This is a strange and counterproductive situation since by not floating a tender and not allotting molasses, even on an ad hoc basis, to the consuming industries, the production activity of downstream units have stopped unnecessarily. The Tamil Nadu government is also losing revenue because of this short-sighted approach. Even without a tender or an allotment policy, molasses are permitted to be sold to units outside Tamil Nadu and can also be exported. Obviously, there is a lacuna in the government's approach.
Earlier, there used to be a standing committee constituted by the government that used to look into the need for molasses by different units and adopt appropriate allotment approach for molasses. Such a committee is now conspicuous by its absence.
N S Venkataraman Secretary,
Chemical Industries Association Chennai
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