With the Punjab elections safely out of the way, the government yesterday finally mustered the courage to announce a hike of Rs 1.45 a kg in the retail price of sugar for the public distribution system (PDS).
Even at the new price of Rs 10.50 a kg, PDS sugar will be subsidised to the extent of over Re 1 a kg. The earlier price, fixed in February 1994, was Rs 9.05 a kg and carried a subsidy of Rs 2.55 a kg at the current level of cane prices and other costs, according to food ministry sources.
Although the decision about the upward revision of levy sugar prices was taken by the Union Cabinet a couple of weeks ago, it had chosen to defer the announcement for fear of an adverse fall-out on the poll prospects of United Front constituents in Punjab.
The Congress (I), which was earlier ruling in Punjab, was also opposed to a hike in sugar retail price on the eve of polls.
An official note issued here yesterday pointed out that the retail PDS prices for sugar were not revised for the past three years despite an increase in the statutory minimum price of sugarcane every year.
The government was, consequently, subsidising PDS sale of sugar to the extent of around Rs 60 crore a month.
