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Lesson 24 (in Hindi)
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In this lesson next question is discussed.

Ashna Sisodia is teaching live on Unacademy Plus

Ashna Sisodia
A passionate teacher, having scored 125+ in the prelims and 140 in Essay Paper and 110+ each in GS 2 and GS 3 in the UPSC Mains 2017.

Unacademy user
  1. Course: Expected Questions Geo-Mains Paper GS- 1 Presented by Ashna Sisodia

  2. Question 44: It is said that the Indian sugar industry is under severe stress due to many factors. Examine the problems faced by the Indian sugar industry, its recent growth trend and measures taken by the government to address these problems. (200 Word)

  3. Answer At present India is the second largest producer of the sugar. However if gur and khandsari are also included than India can become largest producer. Problems faced by sugar industry: I. At the heart of the crisis is the fall in global crude oil prices along with a decline in the Brazilian currency (real). Lower crude prices means Brazil's mills that have just started crushing would divert less sugarcane for producing ethanol. The extra sugar resulting from this, combined with a weak real, has brought down international prices, making it also further difficult for India to export. 2. India has largest area under sugar cane cultivation yet yield per hectare is extremely low as compared to other countries . This leads to overall low production.

  4. 3. Most of the sugar mills in UP and Bihar are 50 years old. These mills are using old and obsolete machinery 4. High cost of sugarcane, inefficient technology, uneconomic process of production and heavy excise duties result in cost of manufacturing. PC can be reduced by proper utilization of by products in industry Ex: Bagasse can be used in manufacturing pulp, insulating boards, plastics, carbon cortex etc. Molasses can be used gainfully for manufacturing of power alcohol. Press mud can be used for extracting wax. 5. India has short crushing season varying between 4 to 7 months . Mills and workers remain idle for rest of the time creating financial problems for the industry. 6. Most of the mills are small in size making large scale production uneconomic

  5. 7. Per capita consumption of sugar in India is much lower than world average. This result in low market demand 8. Sugar industry is grappling with high stock building which they are not able to clear causing nonrecovery of input cost 9. The 5% blending of ethanol in diesel and petrol is not achieved yet. Producing ethanol is profitable to sugar mills rather than producing sugar. 10. The working capital from banks is becoming difficult because of the issue of debt nonrepayment. 11. Due to stock pile up, these mills are not able to clear the arrears of farmers because FRP is higher than the selling price, leading to discontent among them

  6. 12. Fair and Remunerative Price (FRP): is the existing arrangement for the price to be paid to sugarcane farmers by the Sugar Mills and is announced each year by the Centre, under the Sugarcane Control Order and on the advice of Commission for Agricultural Costs and Prices (CACP), as the minimum price of sugarcane. However, many states in north India also announce a State Advised Price (SAP) under state legislation. Generally, the SAP is substantially higher than the FRP, and therefore wherever SAP is declared, it is the ruling price. Mill owners are obligated to pay SAP to farmers. This system suffers from problems of accumulation of arrears of cane dues in years of high price and low price for farmers in other years and hence C. Rangarajan committee set up in Oct 12 has recommended doing away with this and introducing a profit sharing mechanism

  7. Measures by government to address above problems 1. A major step was taken by government when licensing requirements for sugar mills was abolished in 1998. 2. Sugar import tax to raise from 25% to 40% 3. Centre has approved export subsidy of Rs 4000 per tonne 4. Do away with 12.5% excise duty on ethanol 5. Ethanol blending which is only 3% currently could be raised to 10% 6. Also, urged to give financial assistance directly to sugarcane growers 7. Bagasse generated can be used by power plants to produce electricity

  8. Thank You Very Much . Please Rate & Review . Knowledge is the new currency. Spread the word & Be a Part of Education Revolution