Heat sugar and water in a pan. Let it boil on high flame. When it starts boiling, reduce the flame to medium. And let it boil till 2 string consistency.
Meanwhile cut the paneer in to small cubes and keep aside.
Now when sugar syrup reaches 2 string consistncy, add paneer and switch off the flame. Keep it stirring untill the sugar dries and paneer cubes coat well with sugar.
Keep it mixing and try to separate each paneer cube from each other. Remove in a plate and let it cool down.
When it cooled down completely dust some icing sugar and mix lightly.
Now its ready to serve. (Store in a airtight container)
After adding paneer cubes switch off the flame and keep it stirring continuously until the sugar dries and all paneer cubes coat well with sugar. (otherwise it may stick to a block and become hard).
Store only in an airtight container.
If your sygar is not clean and you see dirt while making sugar syrup, add 1 tbsp milk while boiling sugar with water. Collect all dirt easily and discard.