New Delhi: Sugar production in India, the world’s second largest producer, is estimated to decline by one million tonnes in 2007-08 season ending September this year.

“In 2007-08 sugar season, sugar production is preliminarily estimated at about 27 million tonnes,” the Economic Survey, which was tabled in the Parliament on Thursday, said.

The output in 2006-07 season has been provisionally estimated at 28 million tons, it added.

According to the survey, the sugar availability in the current season would be 38 million tonnes, taking into account the carry-over stock of 11 million tonnes from last season.

There would be enough availability of the sweetener in the season, the survey said, adding that the annual consumption is estimated at 20 million tonnes.

Among various reform options, the survey also favoured the “phase out” control on sugar sector as the government regulates the industry right from from setting up new factories till the sweetener reaches the consumers.

Indian Sugar Mills Association (ISMA) has also been demanding withdrawal of some controls like regulated release mechanism for sale of sugar in the open market and supply of 10% levy sugar.

Instead of subjecting the industry to levy mechanism, ISMA has suggested that the government should buy sugar from open market for supply under public distribution system.

The government has also fixed a minimum distance of 15 km from the existing factory for setting up new units.

The survey also highlighted measures such as export assistance and interest-free loans taken by the government to bail out the industry from glut situation and hoped that it would enable the mills to clear the outstanding cane price arrears.