India has been Known as the original home of sugarcane and sugar,Indians Knew the art of making sugar since the fourth century.However the event of modern sugar industry in india dates back to mid 1930,s when a few vacuum pan units were establised in the sub tropical belts of Uttar Pradesh

and Bihar. Until the mid 50s, the ugar industry was almost wholly confined to the states of Uttar Pradesh and Bihar.After late fiftes or early sixties the industry dispresedinto southern India,western India and other parts of Northern India.

India is the Largest consumer and second largest producer of Sugar in the world.The sufficient and well distributed monsoon rains,rapid population growth and substantiol increases in sugar production capacity have combined to make India the largest consumer and second largest producer of sugar in the world.

The Indian sugar Industry has not only achived the singular distinction of being one of the largest producer of white plantation crystal sugar in the world but has also turned out to be a massive entrprise of gigantic dimensions.With over 450 sugar factories located throughout the country, the sugar industry is amongst the largest agro processing industries,with an annual turnover of Rs.150 bn.It plays a major role in rural development and its importance for India streatches for beyond the role of a sweetener supplier.

The sugar factories located in various parts of the country work as nucleal for development of rural areas by mobilizing rural resurces and generating employment,transport and communication faclilities.Over 45 mn farmers, their dependants and a large mass of agricultural labour are involved in sugar cane cultivation, harvesting and ancillary activities constituting 7.5% of the rural population.The sugar industry employs over 0.5 mn skilled and unskilled workmen, mostly from the rural areas.

Since the beginning of the planning era,sugar indusry oprated under a policy of partial control in 1950-51 and 1951-52,followed by a continuous period of six years of decontrol between 1952-53 to 1957-58.This policy was followed under the pragmatic ledership of then ministerof food,shri Rafi Ahmed Kidwai.However,with his departure,the preception of decontrol was last.

After aletrnating between control and decontrol,the government adopted the policy of partial decontrol in 1967-68 which has since been the main stay of goverment policy,the government procures 10% of production at controlled prices based on the Statutory Minimum Price for sugarcane,for supply through the Public Distribution System and the balance 90% is allowed to be sold by the mills in free market subject to the Monthly release mechanism.

The levy quota for sugar mills has been brought down from the peak levels of 70% in 1968-69 to the presence levels of 10% as a gradual process of deregulation of sugar industry.

The number of operating sugar mills in the country has increased from 29 in sugar year(SY)1930-31 to 434 in SY 2001-02 (sugar year=October 1st to September 30th).The addition i number of mills was at it's peak during seventies when nearly 100 mills were addes betwen 1970 and 1980 to incrase the number of oprating units to 300.The development of industry in the past is as given in table below.

The average capacity of the sugar mills in the industry has considerably moved up from just 644 ton per day in SY 1930-31 to 3285 ton per day in 2001-02. Bot still the growth in the Indian sugar industry was driven by horizintal growth(incrase in number of unites)compared to the vertical growth withessed in other countreies (increase in average capacity)