November 2 1 , 1959

' 'and any packets or parcels contain­i n g such notes received in Ind ia on or a f te r the 22nd June 1959 may be confiscated by Customs and dealt w i t h in accordance w i t h the re lat ive rules, unless they are covered by a special pe rm i t f r o m the Reserve Bank . " T rue , the impor ts o f rupee notes wh ich had reached the scanda­lous f igure of Rs 40 crores per annum, have gone down considerably af ter the Persian G u l f leak was seal­ed. I t is surpr is ing , however, that ^they should s t i l l cont inue as the M o n t h l y Statistics o f Fore ign Trade go to show. The Directorate of Com­merc ia l Inte l l igence and Statistics s t i l l gives out mon th l y f igure o f im­por ts r u n n i n g at an annual average of Rs 12 to 15 crores. They cannot be the rupee notes wh ich are a l lowed to be taken out by ou tgo ing passen­gers, subject to an upper l im i t of Rs 75 per person, f o r when th is l i m i t was imposed, fo re ign exchange dealers abroad were not i f ied that th is a l lowance was f o r meet ing the rupee expenses f o r embarkat ion and dis­embarkat ion in I nd i an ports and that they should not buy these notes "ex­cept to the extent requi red by them to meet sales to bonaf ide t ravel lers coming to I n d i a . " Wha t do these impor ts mean? How do they o r ig i ­nate and why are they a l lowed?

Installed Capacity In Sugar

W H A T does instal led capacity mean in the case of the sugar in

dust ry? Sure ly the concept must be even more elusive than i t is in many other industr ies since product ion of sugar in any year depends so much more on the length of the sugar sea­son than on the amount of sugar produced or the quant i ty of sugar­cane crushed in a day. It w o u l d be mis leading in the extreme to define instal led capacity in the sugar in ­dustry as the quant i ty of sugar that cou ld be produced i f a l l the m i l l s worked a single sh i f t fo r 300 days in a year. Th is is for the ob­vious reason that the sugar m i l l s cannot work fo r 300 days a year un-less the supp ly of sugarcane is con­t inuous over the year wh ich i t is not. The on ly s igni f icant cr i ter ia of capacity fo r sugar is the common-sense one of the length of the sugar­cane season wh ich is counted in terms of the number of days , tha t the m i l l s are able to crush. Th is depends on the length of the per iod d u r i n g wh i ch sugarcane is ava i lab le in adequate quant i t ies. A longer crushing season, other th ings re­

ma in i ng the same, wou ld then mean a h igher degree of the ut i l isat ion of capaci ty, i f the latter is def ined in the usual way.

So when Dr Pun jabrao Deshmukh said at the last meet ing of the I n ­d ian Centra l Sugarcane Commit tee that we were u t i l i s i ng a very h igh percentage of our to ta l ins ta l led capacity in sugar manufacture , h igher than in some of the other countr ies, one is le f t guessing. Wha t exact ly d id he mean? Probab ly he meant that m i l l s work round the c lock when sugarcane is f ree ly ava i l , able and that they crush as much as they can, not tak ing any t ime off or keeping the machinery id le f o r nor­ma l c lean ing or maintenance and that they have no serious prob lems about the deployment of l abour or in runn ing cont inuous shi f ts . I f that is what Dr Deshmukh meant, i t w o u l d be very dif f icult to get any­th ing l ike an accurate statist ical estimate o f i t . The per formance of the sugar m i l l s in respect of capa­c i ty u t i l i sa t ion cannot be assessed, among other reasons, because the M o n t h l y Statistics o f the Produc t ion of Selected Industr ies pub l ished by the Centra l Statist ical Organisat ion stopped g i v ing the ins ta l led capacity in the indust ry af ter 1951-52. That is the latest year f o r wh i ch the esti­

mate is given fo r insta l led capacity-Fo r the subsequent years there are two dots put in th is co lumn wh ich means that the data are not avai l ­able. A number of new uni ts has been licensed f o r sugar, a large amount of fore ign exchange has been al located f o r impo r t o f sugar mach inery and some of these must have been insta l led since 1951-52. W h y the CSO has not bothered to b r i n g the instal led capacity f o r the sugar indust ry up-to-date is any­body's guess. But there i t is and Dr Deshmukh's statement has to be taken on trust. I f is, however, a matter o f considerable interest f o r the Min is te r made the po in t that but fo r the more intensive u t i l i sa t ion of capacity, the s i tuat ion faced in 1952-53 and 1953-54 when we had to im-por t sugar on a large scale, wou ld have become a chronic feature. It is good to know that the m i l l s cont r i ­buted s igni f icant ly in meet ing the g row ing demand fo r sugar by work ­i n g to fu l l e r capacity but i t w o u l d be better i f the CSO had been more in fo rmat i ve on this po in t .

Though the M o n t h l y Statistics of the Product ion of Selected Industr ies does not. f o r some inexp l icab le rea­son, pub l i sh the recent data on i n ­stalled capacity of the sugar indus t ry , the i n f o rma t i on is ava i lab le , of

THE ECONOMIC WEEKLY

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November 2 1 , 1959 T H E E C O N O M I C W E E K L Y

course, wi th the Development W i n g , In the papers circulated at the t ime of the last meeting of the Central Advisory Counci l of Industries, the current installed capacity of the industry is estimated at 20.13 l akh tons as against the Second merit W i n g lists 1,89,000 tons as against the CSO figure, wh ich is for 1951-52, of 13.57 lakh tons. These figures give a fa i r indica t ion of the increase in installed capacity. But l i t t l e can he made out f r o m them of the degree of its ut i l isat ion- In fact, since sugar p roduc t ion has been down for the last three years wh i l e instal led capacity has been going up , crude ar i thmet ic wou ld refute rather than support Dr Deshmukh's conten-t i o m

Besides the current ins ta l led capa­ci ty of 20.13 l akh tons, the Develop, rnent W i n g lists 4,89,000 tons as " add i t i ona l licensed capacity under implementa t ion"- Th is w i l l he ''co­vered hv two consortiums. If the capacity already insta l led and im­plementat ion is taken into considera­t i on , it w i l l he seen that the Second P lan target has already been attain­ed or rather that its at tainment is more than assured.

Sugarcane Acreage

T H E other poin t wh ich D r Desh-m u k h made regard ing the in­

crease in acreage under sugarcane raises doubts about the wisdom of the step w h i c h has been recently taken to step up sugar p roduc t ion , namely, offer of higher prices for sugarcane. The acreage under sugarcane in ­creased f r o m 4.6 m i l l i o n in 1955- 56 to 5-02 m i l l i o n in 1957-58. Th i s shows that even w i t h unsatisfactory standard of cu l t iva t ion and low yields, sugarcane continued to be f a i r l y remunerative to the cul t ivator , F r a n k l y Dr Deshmukh is against i n ­creasing the area under sugarcane as it might encroach upon the area under food crop and under the pre­sent condit ions of product ion, this is exactly what a higher price for cane wou ld h a d to. N a t u r a l l y sugarcane cu l t iva t ion would be even more remunerative, i f the cul t iva­t ion standard was improved but the fac i l i t ies provided to cul t ivators in the f o r m of improved seed, manures and fert i l isers , p lant protect ion ser­vices and i r r i ga t i on were not com­mensurate w i t h the ' o p t i m u m re-quirements" of improved cu l t iva t ion . Dr Deshmukh was confident that technical improvements were pos­

sible and that if the campaign for top-dressing of sugarcane was in­tensified for the next crop and s imple measures such as deeper p lough ing and sub-soil ing were ad­opted, he fel t certain " that in the course of one single season we can produce more sugarcane than could be consumed either by the sugar mi l l s or by the gur and khandsari industry."'

Khandsar i is now the v i l l a i n of the piece, the single largest obstacle re tard ing sugar product ion . Higher sugarcane prices and reduct ion in excise duty offered to m i l l s are i n ­tended to counteract the threat to sugar p roduc t ion wh ich i t represents. The efficacy of these as short te rm measures must be obvious but it is curious that the demand for sugar is expected to increase steadily wi thout affecting in any way the de­mand for gur and khandsari . Th i s

is clear f rom the present estimate-of the requirements of the country by the end of the T h i r d Plan which are taken to be about 30 lakh tons of sugar and 60 lakh tons of gur and khandsar i . Tha t is to say, the p ropor t ion between them is taken at 1 : 2 whi l e cur ren t ly it works out at the s l igh t ly lower figure of 20 l akh tons of sugar against 36 lakh tons of gur and khandsari annua l ly . These are the figures given by S h r i Ameer Baza, President of the Ind i an Cen­t ra l Sugarcane Committee at the last Conference a t wh ich Dr Deshmukh spoke. A r e not white sugar and gur and khandsari substitutes to some extent? A n d i f the consumption of sugar increases so much, w i l l the consumption of gur and khandsar i also go up in the same p r o p o r t i o n or more than p ropor t iona te ly , as the T h i r d Plan estimates assume? I t w o u l d be curious indeed i f i t did-

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