The Hindu Business Line : UP mills to be served notice for excess sugar sale

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UP mills to be served notice for excess sugar sale

Harish Damodaran

Mills cannot dispose of or even remove sugar from their bonded godowns without an FSQ release order from the Directorate.

New Delhi , Oct. 19

The Union Government has completed the inspection process of mills in Uttar Pradesh suspected of selling sugar in excess of the free sale quotas (FSQs) allocated to them.

"The investigations are over and the compilation of reports is now on. By next week, show cause notices to errant factories will be issued," officials told Business Line.

The inspections made by three teams from the Food Ministry covered over a dozen mills in western UP. They include factories of Mr Shishir Bajaj's Bajaj Hindusthan, Mr Dhruv Sawhney's Triveni Engineering & Industries, Mr Siddharth Shriram's Mawana Sugars, Mr G.S. Mann's Simbhaoli Sugar Mills, Mr V.K. Goel's Dhampur Sugar, Mr Mahendra Mohan's Shakumbari Sugar (Jagran Group), Mr U.K. Modi's SBEC Sugar, Mr Rajat Lal's Sir Shadilal Enterprises, Mr Somansh Prakash's Tikaula Sugar and Mr K.K. Bajoria's Agauta Sugar & Chemicals.

`Strict action'

The officials made it clear that the inspections were not of a routine nature and strict action would be taken in case of any violations. "The exercise involved detailed physical verification of stocks at the factories and checking excise records to report any discrepancy vis-à-vis the information submitted to the Sugar Directorate," they added.

Under the Sugar Control Order, the Government fixes the total quantum of sugar that factories can sell in the open market during any month. Mills cannot dispose of or even remove sugar from their bonded godowns without an FSQ release order from the Directorate.

In the event of factories selling less than the FSQ releases, the unsold quantity is automatically converted into levy sugar at lower rates for the public distribution system. In case of excess sales - as it has apparently happened now - the Government can invoke Section 7 of the Essential Commodities Act. This provides for imprisonment of not less than three months and extendable to seven years, besides imposition of fines.

The move to sell extra sugar has been prompted mainly by the bumper cane crop that would translate into a record sugar output of 73 lakh tonnes in UP during the 2006-07 season (October-September), against 58 lakh tonne for 2005-06. The need to clear stocks ahead of the new season and also to make maximum out of the festival demand are said to be key factors here.

It is another matter that once sugar is decontrolled, there would be no FSQs and mills would be free to decide on their quantum and timing of sales. Selling excess or less sugar would not invite any penal action, as is being currently contemplated.

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UP mills to be served notice for excess sugar sale