Rangarajan for freeing molasses, ethanol

In line with his report that paved for the way for decontrol of sugar sector albeit in a limited way, C Rangarajan, Chairman of Prime Minister's Economic Advisory Council on Friday pitched once again for removing restrictions on molasses and ethanol, two sugar by-products, saying it will benefit the key stakeholders, farmers and millers.

“The recommendations have been made. (In case of molasses), it is for State governments to take decisions. The Central government cannot act on its own. It is a  move that will benefit farmers,” he told reporters on the sidelines of the first “National Sugarcane Growers' Conference here.

In his view, States should carry out enabling reforms to facilitate movement of the product for better price realisation. Molasses come within the purview of States and is a key ingredient for making spirits. Low price for molasses translates into cheaper liquor that keeps liquor makers profitable.

On ethanol, he favoured market-determined prices with no specific end-use allocations.  Ethanol blending has also emerged as a sticky issue with oil marketing companies (OMCs) hesitating to float tenders to buy it. In that context, Rangarajan said,   “It depends at which price ethanol is made available and how profitable it is for them. At some cut-off point, ethanol may not be viable for blending, but OMCs have been asked, I think, to float tenders.”

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