Kathmandu, October 11

A sub-committee of Public Accounts Committee of the Federal Parliament has submitted a report to the chair of the parliamentary panel Bharat Kumar Shah recommending removal of quantitative restriction on import of sugar to keep rising prices in check.

The sub-committee that was formed to conduct a study on ‘controlling rampant price hike in the festive season’ submitted its report to the PAC today so that the House panel could instruct the government on the basis of the report’s recommendations to keep the market in order during the festive season.

The sub-committee has concluded that there were anomalies while fixing the price of sugar following the quantitative restriction on import and asked the panel to write to the Commission for the Investigation of Abuse of Authority regarding import restriction, pricing and the government’s incompetence in controlling the price.

The government’s decision to slap quantitative restriction on import of sugar just before the festive season, when consumption of the commodity peaks, ran into controversy after the government was seen to be incompetent in controlling the market price of sugar. The sub-committee’s report has identified flaws in the government’s decision, as the restriction on import was made without seeking commitment from sugar mills on price, quality and smooth supply.

“The Cabinet meeting decided to impose quantitative restriction on sugar import to protect domestic sugar manufacturers without taking measures to safeguard consumers.”

The report mentions collusion between sugar mills and their sister concerns that were importing sugar earlier. It states that due to this complicity, sugar mills and importers have started creating artificial shortage of sugar and are frequently hiking its retail price.

Referring to a report of the Ministry of Industry, Commerce and Supplies, the sub-committee stated that sugar mills were clearing their stock at Rs 53 per kg excluding value added tax in April. The report has recommended the PAC to instruct the government to keep the retail price of sugar at Rs 63 per kg. However, traders have been claiming that Rs 63 per kg is the factory gate price excluding VAT.

The sub-committee’s report mentions that there have been ‘big financial deals’ that led to rampant hike in sugar prices. The House panel formed a sub-committee to study the pricing of sugar and control rampant price hike of goods and services during the festive season after the government said it was infeasible to execute the instruction of the parliamentary panel to cap the retail price of sugar at Rs 63 per kg.

Minister of Industry, Commerce and Supplies Matrika Prasad Yadav had publicly mentioned that sugar price would be maintained at Rs 70 per kg in fair price shops.

The sub-committee’s report has also recommended a raft of measures for robust monitoring of the market to control the price hike, artificial shortage and sale of substandard goods and services during the festive season.