Sugar price: House subcommittee accuses government of favouring cartelThe government has allegedly favoured private sugar producers by imposing quantitative restrictions on its import, promoting a “cartel”, investigation by a parliamentary panel has shown.
The government has allegedly favoured private sugar producers by imposing quantitative restrictions on its import, promoting a “cartel”, investigation by a parliamentary panel has shown.
A subcommittee of the Public Accounts Committee (PAC), headed by lawmaker Lekh Raj Bhatta, on Thursday submitted its preliminary enquiry report to the PAC, recommending the Commission for Investigation of Abuse of Authority (CIAA look into the issue dubbed as “sugar scam”.
Massive financial irregularities have been suspected in letting private sugar mills hike prices of the commodity. The price hike came on the eve of Dashain when demand for the sweetener jumps.
The report suggests immediately scrapping the quantitative restriction imposed on sugar imports.
The report said that a monitoring report prepared by the Commerce Ministry on May 9 shows that the mill gate price of sugar was Rs53 per kilogram, excluding value added tax. However, the finance and other ministries, including their departments, had favoured 12 sugar mills that promoted a “cartel” by fixing retail sugar price at Rs70 per kg, the report said.
The government did not deem it necessary to enforce the deal reached with the sugar mills in which producers had promised to sell sugar after the quantitative restriction was imposed at the earlier rate, the report reads. The government has helped sugar producers increase the market rate sharply in a deal involving “big financial irregularities”, the report concluded.
The subcommittee has recommended that sugar be sold at Rs63 per kg after adjusting the VAT in retail market. “Hence, it is necessary to direct the government again to fix the rate at Rs63,” the report said.
Last Thursday, the PAC directed the government to cap the price of sugar at Rs63 per kg in the wake of a
price controversy. This directive was aimed at preventing the price of the sweetener from rocketing during the Dashain, Tihar and Chhath festivals.
However, a day earlier, the Ministry of Industry, Commerce and Supplies had set the price of sugar at Rs70 per kg. Immediately after the PAC’s decision, a tussle and verbal war started to flare between the PAC members and the ministry.
The government on September 17 limited the import of sugar at 100,000 tonnes for the current fiscal year in order to promote domestic factories. The item became dearer in the local market following the decision.