"So far, deregulation of the sugar industry, which has received a wide measure of support among economists and even high level secretaries' committee on several occasions, has been resisted at the political level," Indian Sugar Mills Association (Isma) president Shishir Bajaj said at the body's 64th annual general meeting.

Government restrictions on the industry inhibited production and need to be scrapped in larger interests, he said, pointing out that the high-powered B B Mahajan committee on sugar industry had recommended deregulation to maximise the commodity's production to meet increasing domestic demand and tap the country's competitiveness in export market. "This resistance for deregulation is primarily on the thinking that deregulation of sugar would lead to additional governmentfunding of pds (public distribution system) sugar.

The subsidy burden at present is borne by free sale sugar through the industry with no government responsiblity. Such cross-subsidisation causes wide fluctuations in production, he said.

The high-powered committee headed by former food secretary BB Mahajan had in its report submitted in April last said government should decontrol the sugar industry in two years and ensure that industry did not subsidise the sugar meant for PDS.