Cabinet split over sugar as many oppose Pawar.

Sugar politics has divided the Union Cabinet, with agriculture minister Sharad Pawar apparently making a strong pitch for a package for mill owners. While the first meeting of an informal Group of Ministers will be held on December 6, several ministers are preparing to oppose Mr Pawar.

The GoM, led by Mr Pawar, includes P. Chidambaram, M. Veerappa Moily, Ajit Singh, Anand Sharma and K.V. Thomas, along with chief ministers J. Jayalalithaa (Tamil Nadu), Akhilesh Yadav (Uttar Pradesh) and Prithviraj Chavan (Maharashtra) as members.

With sugar politics weighing high on poll calculations in Maharashtra and UP, Mr Pawar and Mr Singh, backed by Mr Yadav and Mr Chavan. are pressing for a favourable package for mill owners.

“They want the government to impose import duty of 40 per cent, against the current 15 per cent. Also, they are seeking export incentives, and want the government to do away with excise duty,” a source said, detailing key demands by those supporting a package for the sugar industry.

But minister of state for food and consumer affairs K.V. Thomas, with Mr Chidambaram’s backing, has opposed export incentives and scrapping excise duty. Commerce minister Anand Sharma says imposing 40 per cent import duty will be against World Trade Organisation norms, sources said. The food and consumer affairs ministry will strongly oppose a export subsidy as such measures make domestic prices rise, the sources added.

Another demand by sugar mills, that state governments pay them in advance for the sugar they buy, has not found favour with the Centre, which says this is up to the states.

Source : asianage.com