New Delhi: India's Economic Survey 2012-13 Wednesday said the sugar industry needs more liberalisation to provide better prices to farmers and to increase efficiency of the sector.
"From a purely economic point of view, greater play of market forces would provide better prices and serve the interests of all stakeholders," said the Economic Survey authored by Raghuram Rajan, chief economic advisor to the finance ministry.
"The government should come into the picture only in situations where absolutely necessary," the survey said.
According to the survey, export ban and controls could be replaced with small variable external tariffs to stabilise prices.
The survey also pointed to the recommendation of the Rangarajan Committee on 'Regulation of the Sugar Sector in India'.
"States that want to provide sugar under the public distribution system may procure it from the market according to their requirement, fix the issue price and subsidise from their own budgets," the survey quoted from the Rangarajan Committee recommendations.
India is the largest consumer and second largest producer of sugar after Brazil. Sugar and sugarcane are notified as essential commodities under the Essential Commodities Act, 1955. The country's sugarcane production during 2012-13 is estimated at 334.54 million tonnes.