CCEA also substantially increased subsidies to farmers for purchasing decontrolled fertilisers like diammonium phosphate, and both domestic and imported muriate of potash, Sompal said.

The fertiliser subsidy has been increased to offset the effect of increased costs of imported raw material and nutrients on account of devaluation of the rupee, he said.

Describing the decision on sugar as `historic', Sompal said there would be no obligation on the sugar producing units to earmark a portion of their produce for selling to the government.

At present, sugar producers have to mandatorily keep 40 per cent sugar as government supply for the public distribution system, he added.

Consequently, all incentives to producers in lieu of the levy on sugar would be discontinued, he said.