Monday, July 23, 2007

Reading Room
Who Owns CBI: The Naked Truth
B. R. Lall


Rewind to 1994. Sugar scam was in the news. “One afternoon, suddenly the sugar price soared from Rs 8 to Rs 16-17 per kg. After great hue and cry, the price settled back at Rs 14-15 per kg,” narrates B. R. Lall in Who Owns CBI: The Naked Truth ( http://www.manaspublications.com/).

“The facts unfolded that some nominal shortage was expected; so one shipload was imported at a high rate of Rs 16 per kg around May, when 70-lakh tonnes of sugar were in stock,” he explains. “Since sugar production season was complete by April, all the costing had been completed and the issue price was also fixed. Subsequently when sugar was imported at such a high cost, the inland prices of stock were made to jump to the same level.” An additional Rs 6 per kg to the existing stock meant a neat Rs 4,200 crore! Eerie. About a week ago the central bank asked all commercial banks to sanction additional loan limits of Rs 420 crore to sugar mills for creating buffer stock.

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