Justifying the Government's decision to decontrol the Rs 80,000 crore sugar sector, Finance Minister P Chidambaram on Saturday said that the Centre will bear an additional annual subsidy of Rs 2,600 crore on account of the move only for two years.
Sugar decontrol will ensure timely payment of sugarcane growers, he said while addressing mediapersons.
This past week, the CCEA had partially decontrolled the sugar sector by giving freedom to millers to sell in the open market and removing their obligation to supply the sweetener at subsidised rates to ration shops.
Following the decontrol, Chidambaram said, “states are free to procure sugar through competitive bidding or otherwise sugar mills at a price or inclusive price not exceeding Rs 32 a kg. The Government of India will bear the difference as a subsidy for two years.”
He said the decision of decontrol was overdue and has been taken after nearly 20-21 years.
“Now, this decision means that eventually the states have to make their own arrangements (for PDS sugar). But for a period of two years, we are supporting a transition arrangement,” the Finance Minister said.
Noting that the Centre's sugar subsidy will rise after the decontrol, Chidambaram said, “some of you (pointing to journalists) have pointed out correctly, the subsidy bill will go up. It will go up b approximately Rs 2,500-2,600 crore per year.”
Presently, the sugar subsidy is around Rs 2,600 crore. Post decontrol, it would go up to Rs 5,300 crore.
On Black Money
Chidambaram informed that that a probe has been initiated against the individuals whose names appeared in a global report on the black money stashed in various tax havens globally.
“Yes. We have taken note of the names and inquiries have been put in motion in respect of the names that have been exposed,” he said when asked whether the Government has taken any action with regard to expose in connection with bank accounts in tax havens.
A worldwide media expose has claimed to have unearthed details of 2.5 lakh individuals and entities from more than 170 countries, including India, that evaded taxes by setting up companies in tax havens.
The International Consortium of Investigative Journalists (ICIJ), a body of newspersons from across the world, has reportedly found a trove of 2.5 million digital files, detailing “secrets of more than 1,20,000 offshore companies and trusts and nearly 1,30,000 individuals and agents”.
On Cobrapost Sting
He also said that the RBI is seriously looking into revelations of the Cobrapost sting operation on top private banks and warned of “stern action”.
“RBI is seriously looking into the matter,” he said, adding, “my officers have taken a look at ... Sting. They have drawn some conclusions, we are looking into it. If violation is found (with regard to tax laws), stern action will be taken.”
The sting operation had been conducted by the portal, alleging money laundering by some officials of ICICI Bank, Axis Bank and HDFC Bank.