New Delhi, Apr 24 (IANS): Union Finance Minister Pranab Mukherjee said Tuesday that the government is using a variety of instruments, including trade policy, to keep prices of sugar stable in the country.

"The government of India has been seeking to stabilise sugar prices by moderating the volatility during scarce and surplus domestic sugar seasons," Mukherjee said after inaugurating the 41st council meeting of the International Sugar Organisation here.

"We have been using a variety of instruments such as trade policy, including the import of duty-free raw sugar under advance authorisation scheme, or import of duty-free white or refined sugar by certain government agencies and import of duty-free raw sugar under Open General License," the finance minister said.

He emphasised the need for using better technology to improve the quality of sugar and enhance the usages of sugarcane for energy generation.

Mukherjee said the sugar sector, one of the largest agro-based industries in India, was critical for rural development. Around 50 million people are involved in sugarcane cultivation and harvesting in India. It also supports employment in various ancillary activities.

"As we move forward, we must ensure that the sugar sector has access to the latest technology for enhancing production and productivity," he said.

India is the world's largest consumer and second largest producer of sugar.

As per the Indian Sugar Mills Association (ISMA) estimate, sugar production in India is expected to reach 260 lakh tonnes in the current marketing season that ends Sep 30, 2012.