PRIVATIZATION OF AGRO INDUSTRIES WITH REFERENCES TO DHAMPUR SUGAR MILL LITD.

Abstract

Privatization means transferring the control of an enterprise from government to private sector .Its objective is to increased efficiency and to reduce government interference in the economy and to promote greater private initiative.

The agro industry is regarded as an extended arm of agriculture. The development of the agro industry can help stabilize and make agriculture more lucrative and create employment opportunities both at the production and marketing stages. The broad-based development of the agro-products industry will improve both the social and physical infrastructure of India. Since it would cause diversification and commercialization of agriculture, it will thus enhance the incomes of farmers.

The sugar industry is regulated right from cane production to cane pricing, allocation

of cane area to distribution of sugar by the respective state governments and the

central government. With the levy sugar obligation remaining unchanged at 10%,

the balance 90% sold in the open market as free sale sugar is subject to restrictions

in the form of release mechanism under which monthly free sale quantities are fixed

by the central government. The release mechanism under the Essential Commodities

Act has been used to achieve price stability, ensuring sugar availability and enable

the sugar mills to pay the statutory minimum support price for the sugarcane fixed

by the government.

India is the largest consumer and second largest producer of sugar in the world India is the largest consumer and second largest producer of sugar in the world. The Indian sugar industry is the second largest agro-industry located in the rural India. The Indian sugar industry has a turnover of Rs. 500 billion per annum and it contributes almost Rs. 22.5 billion to the central and state exchequer as tax, and excise duty every year (It is the second largest agro-processing industry in the country after cotton textiles. With 453 operating sugar mills in different parts of the country, Indian sugar industry has been a focal point for socio-economic development in the rural areas. About 50 million sugarcane farmers and a large number of agricultural laborers are involved in sugarcane cultivation and ancillary activities, constituting 7.5% of the rural population. Besides, the industry provides employment to about 2 million skilled/semi skilled workers and others mostly from the rural areas.
The industry not only generates power for its own requirement but surplus power for export to the grid based on byproduct biogases. It also produces ethanol, an ecology friendly and renewable energy for blending with petrol.

Better realizations from sugar and rising contribution from its co-generated power business boosted Dhampur Sugar Mills Ltd’s performance in the December quarter. The Rs946 crore turnover sugar company’s revenue rose by 29% to Rs347 crore, while net profit jumped fourfold to Rs57 crore, compared with the same period last year.

PRIVATIZATION ;It is  the incidence or process of transferring ownership of a business enterprises agency o r public services from the public sector (government) to the private sector (business).In a broader sense privatization refers to transfer of any government function to the private sector including departmental function like revenue collection  and law enforcement.