New Delhi, Jun 23 (KNN)  In a move that  pushed  prices in the domestic market, the government today decided to increase import duty on sugar imports by a hefty margin taking to 40 per cent from 15 per cent as a bail-out package for the industry with farmers’ arrears of Rs  11,000 crore.

The decision was announced by Food Minister Ram Vilas Paswan following a direction from Prime Minister Narendra Modi and a high-powered inter-ministerial meeting.

Additional interest free loan up to Rs 4,400 crore would also be given to the sugar industry to enable them to pay arrears to the cane-growers. Besides, export subsidy of Rs 3,300 per tonne will be given till September this year.

Paswan said sugar will be also used for blending ethanol with petrol.  As much as 10 per cent ethanol will be blended in petrol, thus raising demand for sugar.

The meeting was also attended by Principal Secretary to the PM Nripendra Misra and Cabinet Secretary Ajit Seth.

Following the decision, prices jumped up by 1.5 per cent in the wholesale markets. They may rise further if Monsoon rains remain deficient, traders said.

Although India is world’s largest consumer of the sweetener, it is for the fifth straight year that the country has produced much in excess of the domestic demand.  (KNN Bureau)