The latest development in the ongoing saga of decontrolling sugar from government control is Agriculture Minister Sharad Pawar meeting the Prime Minister Manmohan Singh on Thursday to present a case for liberating the sector. Earlier the parliamentary panel on food and agriculture had recommended against sugar decontrol, saying that it will harm both farmers and consumers.

The sugar industry, at present, is controlled by government, by specifying the quantity to be sold in the open market and through public distribution system (PDS) every month. With the imminent bumper crop, which will be ready in two months’ time, the move to decontrol sugar is gaining momentum.

The presentation made by Mr. Pawar to the Prime Minister is believed to include plans and methods Food Ministry will be adapting to free sugar industry from governmental control. Mr. Pawar is understood to have discussed the beneficial outcomes of the move for farmers and consumers.

Among the proposals put forth by Food Ministry is doing away with the practice of setting monthly quota for sale of sugar in open market and through ration shops. Now, sugar mills are bound by law to sell 20% of the sugar produced to government for sale in ration shops. To meet the sugar requirement for PDS, the ministry has advocated purchase of sugar from the open market.

It is believed that the Food Ministry has proposed to give freedom to farmers to sell their produce wherever they want to, instead of the present practice of selling sugarcane to specified mills.

Earlier, Mr. Pawar had hinted that despite decontrolling sugar industry, the government would continue to fix Fair and Remunerative Price (FRP) for sugarcane to protect farmers from exploitation. This is the minimum price to be paid by mills to buy sugarcane from farmers.

The BlackBerry issue is not yet resolved; the government is stepping up efforts to get data access to all communication services in the country. The Home Secretary G K Pillai said that notices are being sent to all companies providing communication services in India to make available access solutions to security agencies so that they can monitor the data as and when required. The firms are also being asked to set up a server in India.

Most important among the service providers who are issued notices are Google and Skype, the internet phone call provider. The notice asks the firms to make suitable arrangements to provide access to their services within the next 60 days.

Meanwhile, Research In Motion (RIM), the BlackBerry maker averted an imminent ban on its services by agreeing to set up a server in India and provide partial access to its encrypted data. Home Minister P Chidambaram confirmed that RIM has already begun providing access to some of the communications transmitted through its system. The government has given the smartphone maker a 60-day extension of August 31 deadline for complete compliance. The minister added that there won’t be any compromise on national security with regards to BlackBerry, Google or Skype.

“Discussion on technical solutions for further access is continuing and the matter will be reviewed within 60 days,” the minister concluded. “Our stand is firm. We look forward to get access to data… There is no uncertainty over it.”

Mr. Pillai said, “People who operate communication services in India should have servers in India as well as make available access to law enforcement agencies, whatever communications passes through telecommunication network in India and that has been made clear to RIM of BlackBerry but also to other companies.”

Backed by splendid year-on-year growth in manufacturing sector and rising farm output, Indian economy grew at the fastest rate in the past three years in the June-ending quarter. While the economy expanded by 8.8%, the manufacturing sector grew by 12.4% and annual farm output rose by 2.8%.

The latest growth figures reiterates the fact that Asia’s third-largest economy did not lose momentum during the period, despite the slow pace of global recovery and concerns of another round of economic downturn. The country also had to deal with the near double-digit inflation, which demanded strong fiscal measures.

The Reserve Bank of India was in a dilemma earlier whether to go all out in containing the runaway inflation without harming the amazing run of the economy. The central bank has stated time and again that containing inflation is being giving precedence to other policy objectives and followed it up by hiking interest rates four times in the last four months. The fact that economy is sound and steady gives RBI ample space to maneuver and focus on inflation-control fiscal tightening measures.

The consistency in economic growth is mostly due to the buoyancy in the domestic consumer market. This is thoroughly reflected in the automobile sales, which rose by 38% in July, forcing car manufacturers to run their factories to the optimum capacity.

The manufacturing sector witnessed a robust growth of 12.4% y-o-y. This growth is substantial when compared to the growth percentage of 3.4% for the same period last year. The agriculture sector expanded by a healthy 2.8% during the quarter. The trend is expected to continue on good monsoon forecast.

The sturdy growth may prompt RBI to go in for another rate hike during its quarterly policy review scheduled on September 16.

In response to the discussion paper circulated by the Department of Industrial Policy and Promotion (DIPP) on permitting 100 per cent FDI in multi-brand retail, the Consumer Affairs Ministry has disclosed its views through a letter to the Commerce Ministry. While recommending 49% foreign investment in multi-brand retail, the ministry wants enforcement of a law at the state-level to protect small stores from the onslaught of big brands.

The Consumer Affairs Ministry has also put in a recommendation to set aside a significant chunk of investments for the development of back-end infrastructure, logistics and agro-processing, which is the dire need of the hour. To regulate the fiscal and social aspects of the retail sector, the ministry has sought legislation of the National Shopping Mall Regulation Act. This should also allow local stores to become franchises of multi-brand retail stores.

Meanwhile, the discussion on the topic is gaining momentum in the country with clearly demarcated supporters and opponents. The feedbacks received by DIPP till date reveals a huge chasm between the two groups. While the retailers and industry, both domestic and overseas, favor the introduction of FDI in multi-brand retail, the unorganized sector comprising of farmers, traders and shopkeepers are resisting the move with all their might.

At present, India allows 51% FDI in single-brand retailing and 100% FDI in wholesale or cash-and-carry operation. With Indian economy expanding at an amazing rate, backed by the growing domestic consumption, top international retailers are eagerly waiting for the legislation to enter multi-brand retail segment to exploit the opportunity. Global retailers Walmart and Carrefour are leaving no stones unturned to strengthen their case.