Delicensing is a non-issue as far as the private sector sugar industry is concerned. Even before the delicensing came into effect, there were more than 200 letters of intent (LoIs) issued which were not being implemented because the industry was unviable.

It is learnt that the new units would not be entitled to any incentives which is a step in the right direction. This would lead to the vertical growth of the industry, rather than the horizontal growth. It would also lead to mergers and acquisitions in the long run and the number of units would tend to go down from the present 460 units.

Thegovernment has delicensed the sugar industry with a distance criterion of 15 km, which is too low to ensure the satisfactory operations of a sugar mill. This should be increased to 25 km as has also been recommended by the Mahajan Committee. Monitoring of the distance norm should vest with the Food Department rather than the state governments. Centre's monitoring would involve registration of sugar units by the Directorate of Sugar.

Before the announcement of delicensing, there were hardly eight or 10 factories which were under implementation. Those factories are naturally completing the installation of their units. After the announcement of delicensing, it would be uneconomical for any factory to be set up and no new factories would come up in the present situation, especially as no incentives would accrue to any new factory being set up.

The Indian sugar industry, the largest producer of sugar in the world, with an estimated production of 12.8 million tonnes of sugar this year and with an estimated turnover of approximately Rs 20,000 crore next year, is in peril because of the havoc created by large imports of sugar. As such, 40 million farmers connected with this largest agro-based industry are also threatened.

India, unfortunately, has the lowest import duty in the world hardly 12 per cent of which is resulting in the dumping of sugar in the country. EU has 200 per cent duty, the US 155 per cent, Bangladesh 200 per cent and Pakistan 35 per cent. Under the WTO, India can impose a duty up to 150 per cent. Today, India does not need any imported sugar. As on October 1, 1998, before commencement of the next season, India would have an estimated sugar stock of 5.5 MT against a normal requirement of three months consumption of 3.5 MT of sugar. Hence, we shall have an excess stock of 2 MT of sugar as on October 1,1998. Moreover, next year's sugar production and consumption are estimated at 15 MT each.

It is unfortunate that 12 lakh tonnes of sugar has already been contracted with APEDA and 7.5 lakh tonnes of sugar has already landed at Indian ports. Still imports are continuing at a fast rate of 80,000 tonnes a month. In fact, the government has already drained out Rs 1200 crore of precious foreign exchange by way of imports which were not at all necessary.

The European Union is today producing sugar at $ 800 per tonne and dumping into India at $ 265 per tonne. Moreover as a result of the Asian crisis those countries have put a ban on the import of sugar. Moreover, Russia, a big buyer of sugar in the international market, has also banned the import of sugar. Hence India, with a nominal of 5 per cent customs duty, is the only country in this region where the entire sugar of Pakistan, Thailand, South Africa and EU is beingdumped.

It is unfortunate that imports are benefiting the multinationals and the farmers of foreign countries at the cost of the 40 million Indian farmers, the Indian sugar industry and ultimately the Indian consumer.

Pakistan has contracted for 6 lakh tonnes of sugar and is dumping its sugar into India by giving a subsidy of Rs 4,000 a tonne. Pakistan has 35 per cent import duty. Hence it is extremely imperative that the customs duty in India is also increased from the present 5 per cent to a minimum of 25 cent in addition to the existing countervailing duty of Rs 850 per tonne (around 7 per cent) for halting these unwarranted imports which is ruining this industry. Still the duty in India would be lower than that of Pakistan.