Financial Daily from THE HINDU group of publications
Wednesday, Feb 06, 2002
Government - Policy
Industry & Economy - Economy
Grain curbs off, sugar freed, new policy for drug sector
NEW DELHI, Feb. 5.
THE Government today cleared a host of long-pending reform measures, especially in the agriculture and pharma sectors, thus fulfilling the promises made in the 2001-02 Budget.
On top of the proposals cleared by the Union Cabinet on Tuesday was the move to remove all restrictions on movement and storage of food grains, edible oils and sugar and to completely decontrol the sugar industry in the coming fiscal after operationalising futures trading.
Exports of wheat and wheat products, coarse grains, butter and pulses have been freed. Onion exports hve also been freely permitted up to seven lakh tonnes per annum.
The reform push also covers the pharmaceutical sector, with the Government unveiling a new drug policy which aims at ensuring availability of good quality essential drugs, creating an incentive framework for the sector and reducing the span of price control substantially.
A start has also been made in the promised downsizing of government staff with the offer of a voluntary retirement scheme (VRS) for employees in the surplus pool. The 300-odd surplus employees will be eligible for an ex gratia amount equivalent to emoluments (basic+DA) of 35 days of each completed year of service and 25 days for each year of the balance of service left until superannuation subject to certain conditions.
All restrictions on the movement of food grains have been removed, with the Union Cabinet scrapping the requirement of licensing of dealers and restrictions on storage and movement of food grains and edible oils. Twelve items have also been removed from the purview of the Essential Commodities Act.
With today's clearance, the Finance Minister, Mr Yashwant Sinha, would be in a better position on the issue of implementation of budget promises. Already, he has faced flak for making pronouncements without being able to implement them on the ground.
In the 2000-01 Union Budget, Mr Sinha had said that the "agriculture sector was constrained by the existence of a number of inhibiting controls and regulations including the ECA. In the changed present situation, undue restrictions on movement and stocking of food grains and agriculture produce is acting as a disincentive to farmers''.
A similar commitment was made by the Finance Minister on the issue of drug price control and also on downsizing.
The Cabinet also reviewed the dismantling of the administered price mechanism on petro products. Following the differences between the Finance and Petroleum Ministries on fundamental issues -- including the duty structure, price stabilisation mechanism and handling of irrecoverable taxes -- the final decision on APM has been left to the Prime Minister Mr Atal Bihari Vajpayee.
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