Sugar, alcohol, beverage industries under stress in Karnataka: Study
As for sugar growth, the report stated that it was highly regulated, almost over regulated, and the industry was under immense stress.
Published: 03rd March 2020 07:01 AM | Last Updated: 03rd March 2020 07:01 AM | A+A A-
BENGALURU: Over-regulation and pricing in the sugarcane industry, erratic growth in the alcohol and beverage industry and lack of uniformity of licences in the tourism industry — these were some of the findings of a study conducted in Karnataka.
The study — An Integrated Value Chain Approach to Ease of Doing Business: A Case Study of Sugar, Alco-Bev, and Tourism — conducted by the Pahle India Foundation, was released in the city on Monday.
It found that with respect to alcohol, duties have grown at CAGR (Compound Annual Growth Rate) of 6 per cent since 2013. “The year-on-year growth has become more erratic. This presents formidable problem for business planning and continuity. Close to 44 procedures and approvals are needed for production and movement of alcohol,” the study pointed out.
As for sugar growth, the report stated that it was highly regulated, almost over regulated, and the industry was under immense stress. “One of the primary problems faced by the sugar industry is with regard to the pricing of sugarcane. The Rangarajan Committee has recommended a revenue-sharing model between farmers and millers which needs to be implemented fully,” the report advised, adding that realising the economic potential of its by-products is one way of restoring financial health to the sector.
The study estimated that with tourism, domestic footfall has gone up and foreign footfall has come down. There are huge compliance costs and recent issue of licences required to play even recorded music is unique to Karnataka, the report revealed. “In the report, we have shown the inter-linkages between Sugar, Alco-bev and Tourism sectors and have established that even a small positive change in policy can have a domino effect on the entire value chain across all the three sectors with direct value addition to the employment and GSDP,” said Nirupama Soundararajan, senior fellow, head of research of the foundation and one of the co-authors of the report.
“Maharashtra has implemented 35 reforms based on the recommendations of this report. Uttar Pradesh has recommended ten of our recommendations. We are confident that Karnataka will also give our recommendations due consideration,” she added.