Agriculture minister Sharad Pawar has his way on sugar export subsidy.

NEW DELHI: Agriculture minister Sharad Pawar prevailed upon the food ministry to push subsidy for export of sugar by private manufacturers at a price closer to what he had originally proposed. The Cabinet committee on economic affairs (CCEA) on Wednesday approved Rs 3,333 as subsidy for exporting every tonne of raw sugar.

While food minister K V Thomas had initially proposed the subsidy at Rs 2,000 per tonne, Pawar wanted it fixed at Rs 3,500 to make exports viable for Indian sugar millers.

The decision came a day after a CCEA meeting on Tuesday evening saw some fireworks between Thomas and Pawar, sources said. It is learnt that while an informal group of ministers headed by Pawar had agreed to recommend Rs 3,500 subsidy per tonne to the Cabinet for approval, the food ministry's proposal was nowhere near that.

Sources said this did not go down well with Pawar. Following the disagreement, Thomas reportedly walked out, saying there was no point in attending such Cabinet meetings.

The proposal to provide subsidy for sugar export was deferred twice by the CCEA last week and to find a way out, the GOM had met under Pawar last Friday to work out the subsidy.

Meanwhile, food ministry sources said the Rs 3,333 subsidy per tonne was decided based on a formula which takes into account the present sugar price in international market and the exchange rate of the rupee. "The price fixed now will be applicable for April and May. Then, it will be reviewed again for the next two months. We can't simply finalize a price since we have to follow norms of World Trade Organization (WTO) and this will increase financial burden on government," said a source.

He added that government wanted to steer clear of any allegations or scam in this case since the subsidy was being provided to private players.

Interestingly, Thomas shares a tense relation with Pawar, having written a book about Sonia Gandhi in which he called him a "backstabber". In the book, Thomas had slammed Pawar for walking out of the CWC meeting after which he had broken away to form NCP in 1999.

Source : timesofindia.indiatimes.com