top of page

By:

Rajendra Joshi

3 December 2024 at 9:20:26 am

The ‘sweet’ scam behind the sugar price surge

AI generated image Kolhapur: A sugar shortage can push up prices. But what happens when prices rise sharply despite the country having enough sugar in its warehouses? That is the uncomfortable question emerging from the sugar market’s July-August price surge. There was no evidence of an outright shortage when the new sugar season approached. Government estimates indicated that the country would have around 43 lakh metric tonnes of carry-forward stock. The Centre, relying on this broad...

The ‘sweet’ scam behind the sugar price surge

AI generated image Kolhapur: A sugar shortage can push up prices. But what happens when prices rise sharply despite the country having enough sugar in its warehouses? That is the uncomfortable question emerging from the sugar market’s July-August price surge. There was no evidence of an outright shortage when the new sugar season approached. Government estimates indicated that the country would have around 43 lakh metric tonnes of carry-forward stock. The Centre, relying on this broad availability, permitted exports of 20 lakh tonnes. And yet, the market behaved as though sugar had suddenly become scarce. At the beginning of July, tender prices were around Rs 3,800 a quintal. By the latter half of the month, prices began climbing rapidly. In the retail market, sugar prices that were around Rs 45 a kg reportedly touched Rs 78. The government responded with stock limits and permission for duty-free imports of 10 lakh tonnes. But these interventions address the symptoms. They do not answer the more fundamental question: what caused the price spike in the first place? The first clue could lie in the lifting quota. The quantity of sugar released into the market in July was lower than expected. By itself, a lower monthly quota need not create a crisis when overall stocks are comfortable. But markets are driven not only by physical availability; they are also driven by expectations. A smaller release can create the perception of scarcity. Once that perception takes hold, stock-holding can become more profitable. The initial spark need not be large if the market has enough speculative fuel. This is why the July episode deserves a forensic examination. The timing is particularly significant. July marked the transition from Ashadh to Shravan, when the festive calendar begins and sugar consumption traditionally strengthens. At such a time, the normal expectation would be that adequate stocks are released into the market to prevent abnormal price escalation. Instead, prices moved sharply upwards. Was this coincidence, a genuine mismatch between demand and supply, or something more? The GST system offers an unusually powerful investigative tool. Every registered transaction leaves a digital footprint. A sugar mill selling to a registered trader generates an invoice recording the quantity, value, date and buyer. The trader’s subsequent sale generates another transaction. GST returns and e-invoices can therefore help create a chain showing who purchased sugar, at what price, when it was invoiced and when it was subsequently sold. This information can be matched with physical stock registers, dispatch records and warehouse inventories. The key question should be simple: Did the sugar that was shown as sold actually enter the market? Suppose a trader purchased substantial quantities in July when prices were relatively low, but the commodity remained physically stored at or near the mill. If the stock was released only after prices rose substantially in August, investigators would have a legitimate reason to examine the transaction more closely. That alone would not prove hoarding or cartelisation. A commercial decision to hold inventory is not illegal merely because prices subsequently rise. Large purchases before a price surge. Delayed physical movement. Repeated transactions among related entities. Unusually high margins. Sudden releases when prices peak. These are precisely the patterns that a data-led investigation can identify.

Caste-based Census Sparks Nationwide Debate

Updated: Oct 22, 2024

Caste-based Census

Caste-based identities continue to dominate rural India, directly or indirectly shaping electoral outcomes. Many major elections are influenced by specific caste groups. After the Bihar government released the first phase of its caste-based socio-economic survey, the caste census became a hot topic. The results, backed by evidence, showed improvements in the living standards and social status of marginalised communities, both in cities and villages. With parties like the JDU and NCP backing a caste census, there is growing momentum for the government to conduct one. However, every story has two sides—joy and sorrow. Even Mahatma Gandhi, the Father of the Nation, raised concerns about the caste census.

Rahul Gandhi accused the BJP of being “anti-Bahujan.” The clear meaning is that his father and forefather refused to execute a caste-based census, which might have far-reaching effects and even permanently fracture India’s social fabric. This may be negative for caste-based beneficiaries. The last caste census in India was conducted in 1931 by the British government. Those times were different from the present scenario. The data was made public and became the basis for the Mandal Commission Reports and reservation policies for Other Backward Classes. Rashtriya Swayamsevak Sangh (RSS) has clarified that the caste-based population count data will not be used for core politics. But the agenda for politics is always twisted and expanded.

The Central Government also joined the legal debate by filing an affidavit with the Supreme Court, leaving the matter unresolved. India’s partition, rooted in the divide-and-rule strategy, is frequently cited as a cautionary tale. Including caste in official census data could further deepen social divides. This issue has become a political pressure point, with various states pushing the Centre for action. Although the Constitution uses the term “class” instead of “caste,” the Supreme Court has consistently ruled that caste is a relevant, and at times, sole or dominant criterion for defining a backward class.

After the release of caste-based census data in Bihar, discussions around conducting similar censuses have gained momentum in states like Rajasthan, Chhattisgarh, and Jharkhand. Karnataka, which has already conducted its own caste census, may release its data soon as well.

Notably, all these states are governed by anti-BJP parties. Congress leader Rahul Gandhi also announced that Congress-ruled states have committed to carrying out caste censuses. Meanwhile, the BJP has remained silent on the matter, creating a significant roadblock.

Caste-based censuses focus on proportional representation in areas like jobs and education, with the argument that this will aid in targeted planning for the disadvantaged. However, the situation remains unclear, much like a foggy winter morning. The BJP’s stance on caste-based censuses and reservations seems different, as they fear the caste-based calculations could fragment their traditional Hindu voter base—an underlying concern for the party.

Professor Sanjay Kumar from The Centre for the Study of Developing Societies, says, “Let alone the BJP; no party can openly oppose it; it is not free from danger. BJP gets a large number of votes from the OBC community, their population across the country would be around 52%. Another downside is that the caste-based censuses could disrupt the balance of socio-economic zones. Data theft is a common issue in government systems, and people may feel disconnected from their actual rights.

The moot question is that if the financial status of an ST/SC/OBC or Dalit citizen moves up by a few notches, will his social status change automatically? The lifestyle of any class will only change when the income of a particular class is changed. The actual source of income is employment. The reality is that only metro cities have enough place and space for workers. Aside from the GIDC and IT sectors, less than 30% of industries have their own designated vacancy periods. After a decade, the Jamnagar and Rajkot Corporations have opened their doors to newcomers alongside experienced staff. However, age and caste bias often operate behind the scenes. It’s important to recognise that poverty is also widespread among many upper-caste individuals, and their needs cannot be overlooked. In the overall interests of the nation, terms like SC/ST/OBC, Dalits, etc. must be deleted from the nation’s vocabulary. Every citizen should have only one classification, that of being an ‘Indian’, in the spirit of the constitution.

Last year, when the Bihar government decided to conduct a caste survey in the state, the BJP was also Nitish Kumar’s partner in the state government, and it supported it. Political expert and former professor of Tata Institute of Social Science, Pushpendra Kumar, says, “It is not that the BJP does not talk about caste. It tries to reveal the caste of the Prime Minister as well. For caste politics, the BJP also tried hard to raise the issue of Pasmanda Muslims.”

(The writer is a management professional based in Ahmedabad. Views personal.)

Comments

bottom of page