Govt could bring back sugar release order

The Centre might consider bringing back the release order (RO) mechanism for domestic sugar sales. It could also consider creation of a buffer stock of about three million tonnes, to help mills clear their sugarcane payment dues to farmers.

The dues, over Rs 19,000 crore as on March 31, might spiral further unless sugar prices stop falling. A consensus to this effect seems to have emerged after a meeting of key ministers on Tuesday. A final decision on the economic cost of the proposed measure is expected to be taken by the finance ministry, after possible consultation with the Prime Minister’s Office.

Under the RO mechanism, the central government decided how much sugar each mill in the country could sell in the open market. It was discontinued a few years earlier.

The meeting was attended by Food Minister Ram Vilas Paswan, Transport Minister Nitin Gadkari, Agriculture Minister Radha Mohan Singh, Commerce Minister Nirmala Sitharaman, Petroleum Minister Dharmendra Pradhan, Women and Child Development Minister Maneka Gandhi and Minister of State for Agriculture Sanjeev Balyan.

Officials said an executive order was also likely for raising the import duty on sugar from the existing 25 per cent to 40 per cent.

“A lot of issues were discussed during the two-day meeting between farmer leaders and representatives of state governments on issues concerning the sugar sector. These were once again taken up today and we have zeroed in on a few of these,” a senior official said.

The sugar industry is finding a difficulty in paying the cane price (set by states) to farmers as mills have been incurring losses for the past few years, due to low realisation and high cost of production.

The Centre recently provided a subsidy of Rs 4,000 a tonne for export of 1.4 million tonnes (mt) of raw sugar, to improve the cash position of millers.

The Indian Sugar Mills Association has been demanding that the government also create a buffer stock of at least two mt and restructure millers’ debt of Rs 36,000 crore. Ex-mill prices of sugar have fallen to Rs 21-24/kg in the country, while the cost of production is over Rs 30/kg.

Sugar production in India, the world’s second largest producer, is estimated to be higher than the domestic consumption for a fifth year in a row this season. The government has estimated output at 26.5 mt for the 2014-15 marketing year (October-September), as against 24.3 mt in 2013-14. Annual domestic demand is about 24.8 mt.

New law will bring fares of app-based taxis under proposed Road Transport Act

The Centre plans to bring web-based taxi operators under the purview of the proposed Road Transport and Safety legislation and place their fare structure under the purview of the proposed National Transport Authority. Currently, mobile application-based taxi operators are not regulated since they are not registered as taxi service.

Under a law being proposed, the government wants these "on demand transportation technology aggregators" to register as taxi operators. Section 162 of the Draft Road Transport and Safety Bill 2014 says any operator of public transport, or an aggregator, will be required to provide information relating to the fare structure, the total number of journeys undertaken by passengers and the distance covered by vehicles used by the operator in these services.

Unlike conventional taxi service operators, mobile application-based aggregators such as Uber and Ola do not own the vehicles but act as digital intermediary or marketplace for a passenger to connect with drivers. Their fare structure could vary every day or every hour. Uber, for instance, has a surge pricing model where it charges customer based on the demand and availability of a service.

The provisions in the Bill likely to be tabled in Parliament during the current session will make it mandatory for such service operators to register as taxi operators. They would not be allowed to own, lease any vehicle, employ any drivers or represent themselves as a taxis service unless they register. They also need to be compliant with the Information Technology Act.

Uber, which had been banned by the Delhi government after the alleged rape of a woman executive by one of its taxi drivers but still operates in the city, had also faced service tax notice on it. The company, however, has announced a fare hike of 5-7 per cent on account of service tax. In a mail to its customers, Uber said: "In the Union Budget 2015-2016 presented by Finance Minister Arun Jaitley, an amendment was made to Service Tax rules. This change requires Uber - as an aggregator, on behalf of driver-partners - to collect and remit service tax on fares for all rides on the platform."

The fare structure has been revised accordingly to cover service tax applicable.

THE PROPOSED LAW

Under a law being proposed, the govt wants these "on demand transportation technology aggregators" to register as taxi operators
Any operator of public transport, or an aggregator, will be required to provide information relating to fare structure, total number of journeys undertaken by passengers and distance covered
They would not be allowed to own, lease any vehicle, employ any drivers or represent themselves as a taxis service unless they register
They also need to be compliant with the information Technology Act