Govt must tax sugar, rice exports: Adviser.

The government needs to discourage exports of water guzzlers like sugar and rice through an "environmental tax," to conserve the scarce natural resources for other crops, a senior policy adviser said on Friday.

India has doubled spending on water resources to USD 50 billion in the five years to March 2012, but irrigation remains a major challenge with depleting ground water levels. Farm output is still largely reliant on the June-September monsoon rains.

"We should not be actually exporting the thing too much, simply because that is equivalent to exporting water . An environmental tax on exports would actually save water," Abhijit Sen, the member in charge of agriculture in India's Planning Commission, told Reuters in an interview.

"Rice and sugar are hugely water intensive crops, and if we actually start pushing those crops out, it will be at the cost of production of everything else."

India currently forbids the export of most varities of rice and of wheat to help tame high domestic food inflation. There have been calls to review these bans.

Sen said they could be removed if the monsoons were were normal, as predicted by the weather office.

But traders should not expect subsidies, often granted by the government to make up for the difference between high domestic prices and low global prices, he said.

"There is no case to subsidise any exports, it should be entirely market driven."

Source  :- moneycontrol.com/news