People's Democracy

40 YEARS AGO

Rs 20 Crore For Sugar Magnates

ACCORDING to press reports the union government is considering the setting up of a fund of Rs 20 crore to be utilised by the sugar magnates for modernisation of the industry. The fund will be managed by Industrial Development Bank and the sugar factory owners will have to pay only a nominal rate of interest of 1.5 to 2 per cent.

Though the sugar industry is already earning fabulous profits, it thinks that the profits are not sufficiently high. A committee appointed by the government has recommended that the industry should be modernised to bring the cost of production down. It also suggested replacement of old units with new ones of bigger capacity.

At present the average capacity of a sugar factory is below 1000 tonnes while the committee has recommended that a capacity of 1500 tonnes should be considered as the minimum capacity for expansion. In case of new units it suggested a starting capacity of 1500 or 2000 tonnes with provision for expansion to 3000 to 4000 tonnes.

The committee also recommended merger of smaller units and installation of bigger plant, with bigger capacity. The Development Council for Sugar Industry has also recommended that modernisation of present smaller units should be accompanied by expansion of its capacity.

But the main problem is of raising money for this modernisation and development. As usual, this huge amount is proposed to be raised by increasing excise duty on sugar by 25 per cent. This will automatically increase the price of sugar in the country. Sugar factory owners shamelessly argue that it is necessary for the development of industry and boosting exports.

If this proposal is incorporated in the next year’s budget, people will have to pay higher prices for sugar. Otherwise, they will have to restrict consumption of sugar so that sugar magnates can export it and earn more foreign exchange to add to their profits.

--- People’s Democracy, November 7, 1965