A proposal to abolish the levy-sugar mechanism has been approved by the Cabinet Committee on Economic Affairs (CCEA). Under this mechanism, private millers have to sell a specified quantity of the sweetener to the government at concessional rates.
The CCEA also dismantled the regulated release mechanism, which allows mills to sell only a specified quantity within a fixed timeframe.
Taking to media here after the meeting, Food Minister, KV Thomas said: "According to our estimate, the current market price of sugar is Rs 32 per kg, while the price under the public distribution system (PDS) is Rs 13.50 per kg. This difference between these two prices will be paid to states."
"For this, the Centre will bear an additional subsidy burden of around Rs 2,700 crore," he added.
Information and Broadcasting Minister Manish Tewari, however, said that the price of the PDS sugar will not increase by the move and it will also not affect the common man.